[February 2, 2005]

Layoffs: 13,000 to Lose Jobs After SBC-AT&T Merger

BY JOHANNE TORRES

SBC Communications Inc. announced this week that it plans to eliminate about 13,000 jobs after its recently-announced $16 billion ($1 billion in cash and $15 billion in SBC stock) acquisition of AT&T Corp. closes.

The company said it will cut 5,125 jobs as a result of network efficiencies; another 1,700 will vanish as a result of a combined sales team; 3,400 will be eliminated from business operations and an extra 2,600 extracted from legal, advertising and public relations departments. Both companies expect to achieve most of the reductions through attrition as employees quit or retire.

SBC said it was taking such measures in order to lessen deal costs by at least sixty percent or about two billion in expenses. SBC came to the negotiating table with a 163,000 employee roster, while AT&T brought 47,000 employees. Both companies said job cuts were necessary for completion of the acquisition deal.

The massive layoffs follow recent job cuts by both companies this year. SBC announced it planned to cut 7,000 jobs, while AT&T eliminated 5,100. In an analyst conference SBC said it expects to start making these cuts immediately after combining with AT&T, during the process that could last for about three years.

The deal, expected to make SBC one of the largest telecom companies in the United States, would extend the company’s 50 million client base. Both companies expect the deal to close no later than the first half of 2006.