AT&T to cut 5,000 more jobs

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Posted 9:15AM on Saturday, January 5, 2002

NEW YORK - Long-distance carrier AT&T Corp. announced it will cut another 5,000 jobs and take a related $1 billion fourth-quarter restructuring charge to cover the cost of those staff cuts as well as 5,100 others that were already planned. In a brief statement, the company said the charge, which it announced in October, will fund severance packages and other costs of reducing 5,100 employees cut in 2001 and a further 5,000 job cuts planned for 2002. Employees affected are in mainly in the company's business, consumer and corporate units, scattered across AT&T's U.S. facilities. About 20 percent of the cuts will take place in and around AT&T's headquarters in Basking Ridge, N.J., said AT&T spokeswoman Eileen Connolly. The company's long distance employees, including those operating call centers, are among those departing, Connolly said. More than half of the workers being laid off are management-level employees. Between $250 million and $350 million of the restructuring charge will come as cash severance payments to departing employees, Connolly said. The remaining non-cash charges are related to the building closings and contract terminations. AT&T Broadband, the cable unit that AT&T has agreed to sell to Comcast Corp., is not affected by the move, Connolly said. At the end of 2001, AT&T - including its Broadband unit - counted 120,000 total employees, 17,000 of whom worked in New Jersey, Connolly said. AT&T was the nation's local and long-distance telephone monopoly until its breakup in 1984. Since then, the company has seen its share of the long-distance market disappear to upstart long distance companies, as well as to cellular phones and e-mail. AT&T has predicted its 2003 residential long distance revenues will plunge more than 20 percent. AT&T still owns the world's largest telephone network, in terms of revenue and numbers of customers. AT&T's Business Services unit counts a large number of Fortune 500 companies as its subscribers. Shares of AT&T fell 27 cents to close at $18.37 on the New York Stock Exchange.