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AT&T: More Job Cuts

AT&T: More job cuts predicted

By ROBERT LUKE
Published on: 10/06/04

AT&T’s 6,100 employees in Georgia, and their co-workers across America, are bracing for more job cuts.

The nation’s largest long-distance phone company, faced with declining revenue from both its consumer and business segments, is expected to cut at least 5,000 jobs soon, Wall Street analysts predict.

That’s on top of the nearly 5,000 jobs AT&T has eliminated since the beginning of the year, which brought total employment to about 57,000 at the end of the second quarter.

In metro Atlanta, AT&T now employs 5,200, mainly in business and consumer sales and support and network operations.

A variety of competitive pressures has hurt employment in the telecom sector.

Consider this: Metro Atlanta has lost about one in four jobs in telecommunications in the last 3 1/2 years or so, according to the Georgia Department of Labor. Statewide, one in five telecom jobs vanished. Virtually all of the losses came from wired carriers, such as BellSouth, MCI and AT&T. The latter at one time employed as many as 12,000 in metro Atlanta.

Meanwhile, wireless jobs in the region almost doubled during the period.

AT&T’s impending cuts follow its decision to exit part of the residential market.

In July, New Jersey-based AT&T said it would stop advertising and marketing for local and long-distance residential subscribers after a federal appeals court dismantled regulations that made it cheaper to compete in the residential phone market.

“While most of these cuts will likely come from the consumer segment, we believe the business segment will share the pain as well,” predicted UBS telecommunications analyst John Hodulik.

Price competition is roiling the business market at a time when demand remains tepid, sending revenues tumbling. The business services market accounts for about 75 percent of AT&T’s sales.

“We estimate AT&T’s business segment revenues declined 14 percent to $5.4 billion in the third quarter, accelerating from a 13 percent decline in the prior quarter,” Hodulik said.

He figures AT&T’s consumer revenue will have plunged 22 percent in the third quarter, after dropping 15 percent in the second.

That breathtaking decline has prompted the company to consider writing down the value of its assets.

As for the anticipated job cuts, AT&T spokesman Andy Backover said:

“I can’t speculate on what might occur. But as a company we said in July that we had already reached our 8 percent head count reduction goal for 2004, and that we expected the shift in our business priorities to have a significant impact on head count, and that we would provide more details at the appropriate time.”

All I can say about this is the employees are the last to know and its always a sad situation when others are laid off especially when you know people are working because they have too, not because they want too!


Posted by loni on 10/06 at 01:12 PM in Blogging

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