Dorman was scheduled to appear at the annual Goldman Sachs Communacopia show Wednesday in New York, but he pulled out at the last minute. Some investors suggest the company isn't eager to answer questions about a coming reorganization that is expected to include a wave of job cuts -- and perhaps more.
first reported Friday, AT&T is in the process of eliminating thousands of jobs as it retreats from the consumer market and slashes deeply into its business services unit. The sudden cancellation also helps to revive speculation that Dorman may be on the way out due to his inability to pull Ma Bell out of its plunge.
An AT&T rep said speculation about the possibility of Dorman departuring "is ridiculous and untrue."
People familiar with the plan now say as many as 15,000 employees, or one-quarter of the workforce, could see their jobs eliminated. Some inside the company say about 70% of the workers in AT&T's consumer group are being cut and 25% of the people in the company's business services division are being let go.
The company is expected to take a writedown of around $10 billion, depending on how many operations are cut or closed and how AT&T values its remaining assets.
A few observers point out that while Dorman wasn't handed the company under the best circumstances, his failed strategies and abrupt shifts made the situation worse.
Earlier this year, the company failed to win its case against the Bells --
-- and was dealt a crushing blow on pricing rules. Then, after months of discussions, AT&T failed to come to terms with BellSouth on a merger agreement. Soon after, Dorman, who had vowed to take the high road on price cuts to business users, changed course and slashed prices to keep up with competitors.
Dorman's defenders say the CEO was blindsided by the federal pricing-rule setback. They add that BellSouth pulled out of the merger when it became clear that business services was far from stabilizing, and that Dorman was overruled on his decision to stay away from cut-throat pricing.
AT&T started the year with 61,600 employees. The company has previously announced it has cut 8% of that total, and analysts say the company could end the year with a headcount around 45,000. One source at the company says there are plans for another round of cuts early next year.
Persistent cuts have become a seemingly permanent condition in telecom over the past three years, as the industry continues to suffer from an oversupply of capacity and service providers. Shifting technology trends have also undercut the old-line players as voice-over-the-Internet and wireless calling gain popularity.
All the top phone companies have seen revenue levels slide as consumers increasingly take to cell phones and as businesses jump from one cut-rate calling plan to another. But the greatest hardship has fallen on the Bell rivals like AT&T and
Some AT&T insiders say the cuts are going deep into unexpected areas like business services and sales centers, signaling that the company is effectively trying to shrink to a size small enough to warrant a takeover.
But given the lack of consolidation in the telecom industry of late, few see any imminent deals in the works.
AT&T shares were up 44 cents, or 3%, to $14.80 in midday trading Monday.