AT&T to Cut 12,000 Employees, 4 Percent of Workforce

Citing the economic recession and a plan to streamline its organization, AT&T Inc. today announced that it would cut about 12,000 employees, or about 4 percent of its workforce.

 

The company said it was planning to reduce capital expenditures in 2009 compared to 2008, and that specific plans – to be released with fourth-quarter results in January – now are being finalized.

 

“Associated with these job reductions which will occur in December and throughout 2009, AT&T (News - Alert) will take a charge of approximately $600 million in the fourth quarter of 2008 to pay severance to affected employees,” company officials say.

 

The news comes as another major player in the telecom space – Nokia, the world’s largest maker of mobile devices, further lowered its outlook for the current quarter and all of next year.

 

As TMCnet reported, officials at Finland-based Nokia now say their previous estimate of about 330 million units in the fourth quarter of 2008 – itself a lowered projection – now appears unattainable, as is an earlier annual estimate of a 1.24 billion total units. The mobile device leader still plans to see about 38 percent of the overall market, as it did in the third quarter.

 

Overall, the company sees mobile device volumes falling 5 percent in 2009, compared to 2008.

 

“The mobile device market slowdown has continued more rapidly than previously expected since Nokia (News - Alert) issued an update (about two weeks ago),” the company said. “The industry continues to be impacted by the effects of a global consumer pull-back in spending, currency volatility, and decreased availability of credit.”

 

The two pieces of news caught the attention of TMC (News - Alert) President and Group Editor-in-Chief Rich Tehrani, who is traveling in Indianapolis today.

 

“While both pieces of news are important and I obviously feel terrible for people who lose jobs, this is not unexpected news,” Tehrani writes in a blog entry from the road. “It will be very interesting to see how Apple does in a slowing handset market.”

 

Officials at AT&T say that while they’re reducing jobs in some areas, they’re adding jobs in areas such as wireless, video and broadband, to meet rising customer demand.

 

“Many non-management employees affected by these reductions have a guaranteed job offer under union contracts,” company officials say. “All employees will receive severance in accordance with management policies or union agreements.”