AT&T; Offers Incentives to Low-Level Managers Who Quit; Layoffs May Follow
American Telephone & Telegraph Co. said today that it is asking its senior managers to search for ways to trim their management staffs as part of a “new hard look” at the company’s overall costs.
Senior managers have been authorized to offer selected lower-level managers a payment of 5% of their salary for each year with the company, up to 20 years, if they leave voluntarily, AT&T; spokesman Walter Murphy said.
He said the company’s top executives have not set a numerical goal for work force reductions. Senior managers have been given responsibility for deciding if there is any managerial fat to cut, he said.
AT&T; has been working to reduce costs and improve its bottom line ever since it was divested of its Bell phone companies in the 1984 breakup of the Bell System. The company has eliminated more than 50,000 jobs, mostly among blue-collar workers.
If voluntary separations are not enough to achieve the unit’s goal for work force reductions, the senior managers are authorized to lay off selected managers and give them the same payment, Murphy said.
Union Protection
Managers make up about 100,000 of AT&T;’s total work force of roughly 330,000, Murphy said. He said the company was “not necessarily” satisfied with the size of its non-managerial work force but said any reductions there would have to be made separately because they would have to follow the terms of union contracts.
The first AT&T; unit to be studied for a managerial surplus will be the Business Markets Group, which sells long-distance service, computers and customer-premises phone switches, mainly to large businesses, Murphy said.
“It is clear our cost structure must be reduced. This plan is one of the tools we’re making available to the managers of the business to help make substantial cuts in their expenses to enhance competitiveness and profitability,” Vice Chairman Charles Marshall said in a memo sent to managers today.
Among other cost-cutting steps, AT&T; recently made 4,200 systems technicians eligible for early retirement.
Murphy said the separation incentives would be granted on the basis of seniority in case more than the targeted number of managers accept. If acceptances fall below the target, Murphy said, workers with the least amount of seniority will be laid off.
Cuts at ITT
In another corporate cost-cutting move, published reports today said that ITT Corp. is trimming its 900-person New York headquarters staff by at least half in connection with its sale of a majority interest in its huge telecommunications business.
Some of the ITT employees, who range from executives to secretaries, may be granted early retirement, but most of those affected will simply be laid off, the New York Times said, quoting sources.
The Wall Street Journal said ITT might cut as much as 70% of its headquarters staff. Fewer corporate office workers are needed because about 98,000 ITT employees are being transferred to a joint venture with CGE, a French telecommunications company.
