Pacific Bell to Cut 10,000 Jobs : Communications: The company says it is girding for a new era of tough competition in providing local telephone services.

Pacific Bell, continuing to pare down to become more competitive, said Friday that it will slash its work force over the next four years by an additional 10,000 jobs, including 3,000 in 1994.

The dramatic cutbacks are necessary in order for the company to become more nimble in its pricing of services as cable companies, long-distance providers and others swarm into its markets, said Philip Quigley, Pacific Bell’s president and chief executive.

“This will improve customer service, meet our customers’ need for lower prices and further prepare us for expanded competition,” Quigley said in a statement.

Cable television companies, which already have much of the needed infrastructure in place, long have lobbied for entry into the local phone market. Earlier this week, long-distance company MCI Communications Corp. announced plans to build a network to allow it to compete for local service.

The California Public Utilities Commission recently proposed that most telecommunications markets be opened to any and all comers within three years.

The latest Pacific Bell cuts, on top of 9,500 made since the beginning of 1990, will bring the San Francisco-based phone company’s payroll to 42,000 by the end of 1997. That is significantly less than half its 95,700 level at the close of 1983, just before it became an independent local telephone utility.

Pacific Bell said it will set up a reserve of $576 million in the fourth quarter to cover costs of the staff cuts and planned changes in corporate procedures.

In addition, it will take a onetime charge of $89 million to cover costs related to the spinoff of its wireless companies, as well as a refund to customers for cellular research and development costs that was ordered by the PUC.

As with job reductions since 1990, the company said it hopes to achieve most of the cuts in management and union ranks through early retirements and voluntary departures sweetened by severance packages. However, some layoffs of managers are expected, officials said. The company said it is too soon to say how Southern California or other regions will be affected, because the job reductions will be mostly voluntary.

Pacific Bell also said it plans to streamline many of its outmoded business practices. A recent revamping of one process brought together in one location employees responsible for installing Centrex phone systems in businesses. As a result, those systems are now being installed in one to three days, instead of up to two weeks.

“We have been a large organization,” said Bill Downing, vice president and chief financial officer. “Over time, processes became ineffective.”

Among other near-term moves, the company will postpone management pay increases and require managers for the first time to contribute to their health plans beginning next year.

Steven R. Yanis, telecommunications analyst at Kidder Peabody & Co. in New York, said the job cuts at Pacific Bell are comparable to those at other regional Bell operating companies.

He added that they are “inevitable because of technology and competition.” Improved technologies and automation of functions such as collect calling and information have displaced thousands of workers.

Customers stand to benefit from the increased efficiencies and cost savings, noted Peter Pitsch, Washington-based director of the telecommunications project at the Hudson Institute, a think tank.

“There’s a real upside to this,” he said. “Consumers will pay less and get higher-value services.

“It’s like (the North American Free Trade Agreement). You can lament the fact that jobs will be lost, but the whole idea of free markets exists here as well,” Pitsch said. “Ultimately, consumers are better off.”

He added that Pacific Bell must take these steps. “Otherwise, people, once they have a choice, will go somewhere else.”

A spokeswoman for the Communications Workers of America, District 9, which represents 39,000 Pacific Bell employees, said cuts had been expected. In recent contract negotiations, noted Vira Milirides, the union has focused on ways to make the transition easier for employees. A $9-million program covered by Pacific Bell pays to retrain workers for other fields, she said, and “a lot of people are taking advantage of this.”

Separately, GTE California, which provides local phone service in parts of Southern California, announced plans Friday to cut its 14,000-member work force by 514 management and hourly positions.

A Pared Down Pac Bell

At the end of 1983, when AT&T; was ordered to divest its regional telephone operating companies, Pacific Telephone & Telegraph, the forerunner of Pacific Bell, had more than 95,700 employees. One month later, the California company had slimmed to 78,653.

Pac Bell employees, in thousands:

12/31/84 74,623

12/31/93 52,126

Source: Pacific Bell