SBC Plans to Cut 3,000 to 4,000 Jobs

SBC Communications Inc., the second-largest U.S. local telephone company, said Tuesday that it would cut as many as 4,000 jobs this quarter -- more than double its initial plans -- as it accelerated efforts to reduce costs and stem profit declines.

The reductions, equivalent to as much as 2.3% of the workforce, would cost about $150 million, or 3 cents a share, SBC said. The San Antonio-based company had planned to eliminate 1,500 jobs in the quarter.

SBC, which dominates local calling in California and 12 other states, will eliminate 3,000 to 4,000 positions this quarter through attrition and by offering early retirement packages, said spokesman Larry Solomon. Last month, the company said it would close a third of its 200 call centers and accelerate job cuts.

The carrier cut almost 10,000 workers in the year that ended Sept. 30, ending the period with 172,540 employees, according to a filing with U.S. securities regulators.

“We expect the force reductions to continue well into 2004,” Chief Financial Officer Randall Stephenson told investors at a Lehman Bros. conference in New York.

SBC has had 12 straight quarterly sales declines and expects that trend to continue through most of 2004 amid new competition from long-distance companies such as AT&T; Corp. and cable companies that have begun offering local phone service.

Last month, Chief Executive Edward Whitacre said he would aim to reduce annual expenses by $1.3 billion within three years.

“This is just what you have to do to be in the game: continue to cut costs,” said Paul Wright, an analyst at Loomis Sayles & Co. in Boston, which held 1.92 million SBC shares as of Sept. 30. “All the phone companies are going to continue to cut employment.”

SBC shares fell 20 cents to $23.97 on the New York Stock Exchange on Tuesday. They have dropped 12% this year.

The company also said it would evaluate its dividend and share-repurchase program.

SBC increased the regular dividend 5 cents to $1.13 this year on an annual basis and paid three extra dividends totaling 25 cents.