AT&T to cut 20% of staff, take $12.5B in charges ....7000 Jobs(CBS.MW)

[cthrumatrix]

AT&T to cut 20% of staff, take $12.5B in charges (T)

By August Cole
SAN FRANCISCO (CBS.MW) -- AT&T (T) said late Thursday that it will take a $11.4 billion non-cash asset impairment charge in the third quarter and cut more than 20 percent of its workers this year; earlier, the company had forecast cutting 8 percent of its staff. For the job cuts, the company will take a third-quarter charge of $1.1 billion. By year end, the company said it plans to have less than $7 billion in debt.

snip

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?siteid=mktw&dateid=38267.6779166667-822849800&

Unbelievable... telcom deregulation bill killed this company. They never had a chance to compete for local business....they are finished.

[mbperrin]

1. woo-hoo! Look at that * job machine go!!!!!

It's on fire now, baby!!

[w4rma]

2. Didn't AT&T push for the "deregulation" laws? Seems like self-assisted

suicide, to me.

[cthrumatrix]

4. based on the "promise" of equal access to local customers...never happened

they were "forced" to buy access from the local bell companies and were STUCK with a high price...could never make money from that model and had to withdraw from local service.

Govt. hunf them out to dry ...while the baby bell lobbyists had thier way.

[Jose Diablo]

12. The previous model before the split-up

was based on dividing the long distance revenue stream according to what was called 'division of revenue' model. This model had each operation company, like southern bell, Long lines, Michigan bell, (23 in all) add all the embedded assets used to complete long distance calls and based on each companies assets they would receive a percentage of the long distance revenue. This percentage was used to offset or subsidize the costs to provide local service provided by all the operating companies except long line which went right to the bottom line of ATT itself. And of course, the local operating companies were allowed to charge a local rate that would result in a 'rate of return' based on local call embedded assets, this rate was controlled by the State Regulators. This rate of return also went to ATT company, the owner and provider of investment money to the local companies.

When Ma Bell split-up, a new model was created based on 'access charges' the local companies charge to each long distance company to recapture the subsidy for local calling.

I am here to tell ya, those access charges were enormous. The baby bells bushwhacked ATT. I worked on auditing access charges on the ATT side of the transaction for a while. The numbers were beyond belief. The State Regulators set the access charges too, and they had a vested interest in keeping the access charges high and thus local charges low. There was still money to be made on ATT part, however, I kinda think the Baby bells right from the start had designs to set-up their own long distance markets. Which they attempted do repeatedly over the years.

I think eventually it will go back to a single system like before because the basic bottleneck that caused the original anti-trust lawsuit against ATT that caused the split-up has never really been addressed.

The bottleneck was never the long distance lines (these lines were subsidizing local service). The bottleneck is that 'last mile' to the home and business. This is the part that has always been subsidized.

Of course, now there is newer technology and it is quite profitable using fiber cable to multiplex equipment that is far closer the home and businesses.

I doubt the Baby Bells 'need' any subsidies in the form of access charges now. Of course, you can bet they will fight that battle very hard as will State Regulators.

Have you noticed that you still pay a surcharge for touch tone dialing even though now it does not require any different equipment on the Baby Bells side of the line. Now they say they need the revenue from this to subsidize other parts that are less profitable.

Its all a shell game played by lawyers and regulators.

The regular workers though, they are an OK bunch of people.

[Jose Diablo]

15. But ya know, now that I think about it

Knowing what I know now, about Reagan and the corporate leaders we are now seeing, I believe the primary reason for the divestiture split-up of Ma Bell was about breaking union power and maximizing profit.

I remember in 1981 the management instructed the employees to write letters to congress criticizing Gary Hart of Colorado because he was trying to introduce some legislation or another that was detrimental to Ma Bell. Well, Hart failed in whatever it was he was trying to pass. The phone workers had tremendous power to control government, I doubt they liked it.

I also remember the union obtained for the first time (1983) an agreement to have ALL the contracts with each Operating Company ex spire at the same time, beginning in 1986 (after the split-up).

Now what the management would do previous with different expirations dates would be to move management personnel to the Operating Company on strike. If they all went out on the same time, well that is a considerable amount of power for a union to possess. Think of it, the entire communication network of country held hostage. Of course, the network was practically fully automated except operator assisted calls which management staffed during strikes, the calls would still go through, but new lines and changes, well that was practically impossible. The CWA and IBEW was tremendouly powerful at that time.

Now as for officers of the companies desire to have separate companies, think of the new positions that would open-up.

The Chief Executive Officer of ATT just before ATT agreed to split-up was a man named John DeButts. He was from what I call the old school. I seem to remember he started as a splicers helper and worked his way up.

DeButts made a statement, I think it was in the yearly stockholders meeting 1979 saying the purpose of the officers was to balance the conflicting needs of the: stockholder, employees and the customers. Successful companies always viewed the 3 as equally important to the long term viability of the company. He was a man from the FDR times.

DeButts refused to allow ATT to agree to divestiture and the split-up. Now his replacement, a much younger man, Charlie Brown (no I am not making this up) had a different philosophy. And of course he readily agreed to the split-up.

I think ATT was one of the first corporations in Reagan's administration to come under attack by the government. To diminish union power and increase the new corporatism we see now.

ATT prior to this split-up was like a big family, a very pleasant place to work with a lot of spirit of service to the customer. It took only 6 years to completely destroy this spirit and turn the company into what they called a lean mean fighting company. But still, the officers had to completely destroy the long time employees attitude. Many left as soon as they could.

Beginning in 1991, each and every part of ATT began to experience cutbacks in personnel (management) each year of the lowest performers, so they said. Actually the place became completely political with most of the effort put into looking good rather than doing what was the right thing to do according to the customers needs and other employees. In short, it went from teamwork to cutthroat caused by the officers personnel policies. Talk about fear. Sound familiar?

I won't mention any names, but there is one that has been in the news lately for accounting misdeeds at a company other than ATT that make the bottom line look better, well he made a statement to 2nd level managers during a 'pep' rally that went somewhat like this: if you do not have a college education and you are over 40 years old and you cannot see your belt you are out of here. Isn't he fine caring soul? I think this was in 1988, four years after the split-up.

I think this has more to do with ATT problems than economical.

My experience with ATT in part turned me into a angry fellow. But until recently, I didn't know who I should be angry with. Can you understand now why I dispise Reagan so much and of course Bush.

[progressivebydesign]

3. BUT.. the AP story sayz the unemployment picture is looking up!!!

Wow.. what is that, the 3rd HUGE layoff reported today???

[phantom power]

5. sure. they'll make twice their salary on eBay, after they leave ATT

[UpInArms]

11. third big layoff announced today

AT&T - 7,000 jobs
BoA - 4,500 jobs
Unisys - 1,400 jobs

total in major layoffs today = 12,900 jobs

[malachi]

6. Is this because of the hurricanes?

[cthrumatrix]

7. nope....it's a shit buiness model favoring the baby bells

[malachi]

10. Actually I was trying to be clever and obviously not succeeding.

Every report I've read regarding the employment stats lately, blamed the hurricanes for the upsurge in the unemployment rate. Today I actually saw a headline that the said that the rate fell even though there were hurricanes. Jobless Claims Drop Despite Hurricane (Reuters)

[cthrumatrix]

8. It's 7000 jobs

WASHINGTON, Oct 7 (Reuters) - AT&T Corp. T will cut
about 7,000 jobs and reduce the value of its assets by $11.4
billion due to its retreat from selling services to consumers,
the company said on Thursday.
AT&T said the job cuts, about three-fourths of which had
already been made, would trigger a $1.1 billion restructuring
charge on its third-quarter earnings.
((Reporting by Justin Hyde; editing by Diane Craft; Reuters
Messaging: [e-mail]; e-mail
[e-mail]; 202-898-8444))

[lilymidnite]

9. Call me callous ...

I really feel for the employees of AT&T losing their jobs.

However, AT&T was (is) an unfair competitor. They're major jerks. I can't (won't) give details, but they pull some pretty low tricks to screw the local Bells.

I was once assaulted by an AT&T employee - on the job. He didn't even receive a slap on the wrist.

[Deja Q]

14. They're all shit...

MCI made me pay $80 on a collect call I never accepted or knew about.

Sprint screwed up after I cancelled their service as I dumped them on the last day to avoid paying $150 for an early termination charge. Well, they gave me a $150 charge because they had already renewed the contract in advance!!! :wtf: x(

Right now I like Qwest. But for how long, I wonder...

[young_at_heart]

13. It won't matter to Bush/Cheney.....they'll still be "positive" about jobs

They just keep saying gibberish over and over and over. The facts are not important to them or their followers (for some unexplained reason)!

[UpInArms]

16. Actual Number 7,400 jobs: AT&T to Cut 7,400 More Jobs, Take $11.4 Bln

http://quote.bloomberg.com/apps/news?pid=10000006&sid=aZAro9j3fZSU&refer=home

Oct. 7 (Bloomberg) -- AT&T Corp. said it will cut 7,400 more jobs this year and write down $11.4 billion of assets as the phone company retreats from the residential business it once dominated.

The staff reductions would take AT&T's job cuts to 12,300 in 2004, or 20 percent of the workforce. Eliminating the jobs will result in a $1.1 billion charge in the third quarter, Bedminster, New Jersey-based AT&T said in a statement.

Chief Executive David Dorman, 50, is shrinking staff to 49,000, reflecting his decision in July to exit the consumer business a century after AT&T brought phone service into American homes. AT&T's profit is likely to drop 73 percent this year as calling prices tumble and competitors such as MCI Inc. and Verizon Communications Inc. vie for business customers.

``It's in a meltdown,'' said Paul Wright, an analyst at Boston-based Loomis Sayles & Co., which has $60 billion in assets under management. ``The only thing they could possibly do there is what they're doing.''

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