AT&T to eliminate 12,000 jobs, spend less on new equipment in 2009
Thursday, December 04, 2008 - 05:10 PM EDT "AT&T Inc. on Thursday said it would cut 12,000 jobs, or 4% of its workforce, and spend less on new equipment in 2009 in response to a weakening economy," Jeffry Bartash reports for MarketWatch."Aside from a poor economy, AT&T cited streamlining efforts and a "changing business mix" as reasons for the reductions. The company noted that it's still hiring in its stronger businesses such as wireless, video and high-speed Internet," Bartash reports. "'There's an ongoing industry shift from wireline to wireless and broadband,' AT&T spokesman Walt Sharp said."
"Most job cuts will take place in AT&T's traditional local and long-distance segments, which have been losing customers for years. Millions of ex-subscribers have switched to cable-phone services or Internet-phone companies such as Vonage. Others have chosen to rely exclusively on wireless, especially younger people," Bartash reports. "'AT&T has been losing consumer retail lines at around 10% per year due to wireless substitution and cable competition, necessitating the employee reductions,' analyst Peter Rhamey of BMO Capital Markets wrote in a research note."
Bartash reports, "The reductions will begin in December and continue into 2009, the company said. AT&T plans to book a onetime expense of $600 million in the fourth quarter to pay for severance and related costs... With the economy now in recession, AT&T also said it expects to devote less money to capital expenses in 2009 than it's spending in the current fiscal year. AT&T is on track to spend roughly $17.8 billion or somewhat less on network expenses in 2008. The carrier said it will give more details when AT&T issues fourth-quarter results in late January."
Full article here.
MacDailyNews Take: Hopefully, "spending less on new equipment in 2009" does not shortsightedly involve AT&T's 3G buildout. For now, as we understand it from the vague info we've come across, it sounds like wired resources are being reallocated to wireless which seems like a prudent move to us. Fewer telephone poles and more towers, please! We'll know more in late January at the very latest; likely much sooner, as AT&T will probably want to tamp down the type of speculation and concern seen in our Take's first sentence.


Hopefully, "spending less on new equipment in 2009" does not shortsightedly involve AT&T;'s 3G buildout.
Ahh yes, I was optimistic like that once too... sadly, that's almost certainly where they're going to be cutting corners.