AT&T; Reduces Estimate of Job Cuts, Layoffs
AT&T; Corp., widely criticized for announcing plans to lay off 40,000 employees, on Friday drastically reduced the number of people it will have to fire as a result of its plans to split into three companies.
The telecommunications giant said more employees than it originally expected have opted to take a voluntary buyout package, meaning 18,000 people will be laid off involuntarily, rather than its original estimate of 30,000.
AT&T; also reduced its estimate of the number of jobs to be cut as part of its restructuring, to 34,000 from 40,000, because of plans to rehire about 6,000 workers in growth areas.
“There are more people taking the offer to leave voluntarily, plus we are now estimating that around 6,000 people will be rehired,” spokeswoman Adele Ambrose said.
Despite the reduction in expected job cuts, AT&T; said it does not expect a significant change in the financial impact of the layoffs.
AT&T; took $6.25 billion in pretax charges in the fourth quarter for restructuring costs associated with the plan to split up. About $2.6 billion of that amount was associated with job cuts, Ambrose said.
“We don’t think the impact on the reserve will be very significant,” she said. “Basically, these were all estimates over a two- to three-year period. At the end of the period, we will reassess.”
The company said it originally expected 7,000 employees to take a voluntary buyout package, but instead 12,000 accepted it.
AT&T; shares slipped 12.5 cents to $61.375 on the New York Stock Exchange on Friday.
Sheldon Grodsky, an analyst who follows AT&T; for Grodsky Associates of South Orange, N.J., said the reduction in layoffs was probably meant to quell attacks on the company and boost employee morale. AT&T; is trying to make the cuts “less of a horror story,” he said.
“It’s probably a public relations effort to some extent so that the most visible response to politicians is that it’s not so bad,” Grodsky said. “They’re repairing damage. Their image in communities all across the country has been damaged.”
But company spokesman Rich Blasi denied that the layoff reduction was meant to stem the criticism. “These are business decisions. They are market-driven. They’re driven by customers,” he said.
The unexpected number of employees accepting voluntary buyout offers shows the level of fear AT&T; employees have for their job security, Grodsky said.
“This has been a very unpleasant experience for the employees of AT&T;, and it will continue to be an unpleasant experience for the employees of AT&T;,” Grodsky said.
About 4,000 workers will keep their jobs but will no longer be with AT&T; because their division will be sold, Ambrose said.
On Thursday and Friday, the company ran advertisements in major newspapers announcing a nationwide job bank for employees who will lose their jobs. More ads are planned for Sunday.
