AT&T; Freezes Hiring, Plans Shifts in Jobs : Will Move Managers to Sales, Marketing
American Telephone & Telegraph Co. has announced its first companywide hiring freeze since the 1984 breakup of the Bell System and says it is moving 3,000 managers into sales and marketing jobs.
The freeze, which will last indefinitely, is virtually total except for some college recruiting and “jobs that are strategic to marketing efforts here and abroad,” spokesman Burke Stinson said Thursday.
AT&T; Chairman Robert E. Allen, who announced the plan to employees in a closed-circuit television broadcast Wednesday, said administrative costs were rising too rapidly and he wanted to emphasize increasing sales.
On Wednesday the company reported an unusually large 14% second-quarter increase in its selling, general and administrative expenses. That rise, which AT&T; is now moving to deal with, contributed to a 0.3% slip in profit.
Recruiting Managers
AT&T; is recruiting volunteers for the sales jobs from among its 95,000 entry-level and second-level managers, although all managers are eligible, Stinson said.
AT&T; continues to lose money in the computer business and has been hard-pressed by competitors in long-distance telephone service, its bread-and-butter business. MCI Communications Corp., its closest rival, this week reported record profit and revenue for the latest quarter.
One reason for the increased costs is that AT&T;’s employment has risen by 12,000 since the start of the year, to 315,000, after having steadily declined since the 1984 breakup of the Bell System.
Stinson said Allen regards the increase as unacceptable, although one reason for the sharp rise is that AT&T; began counting the 4,500 employees of AT&T; Philips Telecommunications, a European joint venture with NV Philips in which AT&T; took a majority interest earlier this year.
James E. Olson, Allen’s predecessor, who died in April, oversaw a reduction of 27,000 employees in his 1 1/2 years at the helm.
AT&T;’s employment fell from 374,000 at the time of divestiture on Jan. 1, 1984, to 365,200 at the end of 1984, 337,600 at the end of 1985, 316,900 at the end of 1986 and 303,000 at the end of 1987.
Stinson said the freeze was the first companywide one since at least 1984. It may be the first ever, since before divestiture AT&T; was shielded from the kind of competition that would prompt such a move.
Of the 3,000 people moving into sales, more than 1,000 have already been recruited, Stinson said. That is because the move to shift people into sales began in April in two AT&T; units, the Business Markets Group and Network Operations Group.
