AT&T to Cut 12,000 Jobs, 4 Percent of Staff

Pressured by the economic turmoil and the mounting loss of traditional phone customers, AT&T Inc. is cutting 12,000 jobs, about 4 percent of its work force.

AT&T said today it is cutting 12,000 jobs, or about 4 percent of its work force, because of the economic downturn.

(Paul Sancya/AP Photo)
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The Dallas-based telecommunications company, the nation's largest, said the job cuts will begin this month and run throughout 2009. The company also plans to lower its capital spending next year, and one analyst estimates that reduction could be as much as $2 billion.

The 300,000-person company has announced layoffs several times over the past few years, including in April, when it said it would eliminate 4,600 jobs, but it has been hiring at the same time. This is the first time since the company bought BellSouth Corp. in 2006 that it said overall staffing would decline.

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The new cuts were part of a parade of layoffs tied to the recession. In addition Thursday, chemicals company DuPont announced plans to lose 2,500 jobs, Credit Suisse Group slashed 5,300 and media conglomerate Viacom Inc. jettisoned 850. Yet AT&T, which provides local phone coverage in California, Texas and 20 other states, is also being pulled by another current: the long-term trend of people defecting from landline phones to wireless services or phone service from the cable company.

In the last quarter, AT&T's basic voice lines in service dropped 11 percent. Its wireless customer base, meanwhile, grew 14 percent.

Reflecting that "changing business mix," the company said it still plans some hiring in 2009 in parts of the business that offer cell phone service and broadband Internet access.

The shift away from landlines has accelerated because of the economic turmoil, said Christopher King, an analyst with Stifel Nicolaus. Fewer homes bought means fewer landlines getting installed or transferred. And more are getting disconnected as people look to save money and rely only on their cell phones.

AT&T spokesman Walt Sharp said the layoffs will be "across the company and across the country," but would not specify what departments and cities would be most affected.