(Bloomberg) -- AT&T Inc. is firing about 4,650 workers, trimming the managerial ranks in its fading home-phone business after more than $100 billion in acquisitions.
The cuts equal about 1.5 percent of the workforce, San Antonio-based AT&T said today in a regulatory filing. The firings at the largest U.S. phone company are in addition to the 10,000 reductions announced with the $86 billion purchase of BellSouth Corp. in December 2006, spokesman Walt Sharp said.
Most of the cuts apply to the local-phone business, Sharp said. That unit lost 1.6 million residential lines last year as customers switched to cable and wireless phone service. AT&T has sought to reduce overlap in its operations since buying BellSouth and the former AT&T Corp., with plans to slash annual costs by about $7 billion by 2009.
``The economy may be to blame,'' Credit Suisse's Christopher Larsen said in an interview. ``Wireless substitution is probably a bigger issue. Headcount reductions are a fact of life in a business where you've got certain areas that are shrinking.'' The New York-based analyst is neutral on whether to buy AT&T shares.
Economists predicted this month that the U.S. economy won't grow in the first half of the year, the weakest performance since the 2001 recession, as consumers grapple with falling home prices and increasing energy costs.
AT&T is scheduled to report first-quarter earnings on April 22. In the previous quarter, the company's sales fell short of analysts' estimates after some customers failed to pay their bills, hurt by slowing economic growth.
More Costs
AT&T rose 19 cents to $37.76 at 10:36 a.m. in New York Stock Exchange composite trading. The shares had dropped 9.6 percent this year before today, compared with a 16 percent decline in the Standard & Poor's 500 Telecommunication Services Index.
AT&T plans to book a pretax cost of about $374 million for the cuts in the first quarter. The phone company had about 310,000 employees as of Jan. 31. With new hires in other parts of the business, the company expects overall headcount to remain stable this year, according to the filing.
A minority of the employees affected by the cuts work in the global unit, which serves large corporate customers, Sharp said.
The cuts equal about 1.5 percent of the workforce, San Antonio-based AT&T said today in a regulatory filing. The firings at the largest U.S. phone company are in addition to the 10,000 reductions announced with the $86 billion purchase of BellSouth Corp. in December 2006, spokesman Walt Sharp said.
Most of the cuts apply to the local-phone business, Sharp said. That unit lost 1.6 million residential lines last year as customers switched to cable and wireless phone service. AT&T has sought to reduce overlap in its operations since buying BellSouth and the former AT&T Corp., with plans to slash annual costs by about $7 billion by 2009.
``The economy may be to blame,'' Credit Suisse's Christopher Larsen said in an interview. ``Wireless substitution is probably a bigger issue. Headcount reductions are a fact of life in a business where you've got certain areas that are shrinking.'' The New York-based analyst is neutral on whether to buy AT&T shares.
Economists predicted this month that the U.S. economy won't grow in the first half of the year, the weakest performance since the 2001 recession, as consumers grapple with falling home prices and increasing energy costs.
AT&T is scheduled to report first-quarter earnings on April 22. In the previous quarter, the company's sales fell short of analysts' estimates after some customers failed to pay their bills, hurt by slowing economic growth.
More Costs
AT&T rose 19 cents to $37.76 at 10:36 a.m. in New York Stock Exchange composite trading. The shares had dropped 9.6 percent this year before today, compared with a 16 percent decline in the Standard & Poor's 500 Telecommunication Services Index.
AT&T plans to book a pretax cost of about $374 million for the cuts in the first quarter. The phone company had about 310,000 employees as of Jan. 31. With new hires in other parts of the business, the company expects overall headcount to remain stable this year, according to the filing.
A minority of the employees affected by the cuts work in the global unit, which serves large corporate customers, Sharp said.
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