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AT&T Cutting Consumer Jobs

The first round of layoff notices is on the way.

Updated from 12:28 p.m. EST


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is swinging the ax, and workers at Ma Bell's consumer unit are among the first to get termination notices.

About 340 employees, or 20% of the consumer services group at the former AT&T headquarters in Bedminster, N.J., are being told Tuesday that they are fired, according to people at the company.

Later Tuesday, an AT&T rep said via email, "On the record I will tell you that the actual number was under 150 and that it was spread nationwide across the consumer group and not just in Bedminster." Subsequently he added that the "under 150" figure is "today's announcement."

The move is part of the 13,000 job cuts that the newly merged phone giant put in place in November as San Antonio, Texas-based SBC took over the old AT&T operations. A representative for the merged AT&T declined to comment on any specific cuts or timing but said the company will announce updated head counts quarterly.

Most of the cuts AT&T has targeted are involuntary and not early retirement packages or buyouts.

"This is part of the 'synergy' AT&T spoke about when they announced the deal," said one analyst with no rating on AT&T. "It appears they intend to fold the AT&T consumer business into SBC's consumer business."

The phone giant laid out plans last week at its analyst meeting to lean on its fast-growing wireless and broadband businesses and to cut costs even more deeply than expected.

AT&T is still the nation's largest long distance phone company, but sales have been on a steep decline over nearly a decade as competition and wireless calling have supplanted traditional toll calls.

Observers note that SBC took the AT&T name, but the company seems to want little to do with the former AT&T employees and executives. Among the first moves at the new AT&T was to appoint a

postmerger management team. The lineup was stacked with SBC hard-chargers and included only one senior executive from the old AT&T.

Analysts and AT&T employees fear that is likely to be the pattern throughout the integration process.

AT&T shares closed Tuesday down 13 cents to $26.92.