AT&T to Lay Off 10,000-15,000 Workers, Source Says - TheStreet


(T) - Get Report

is preparing to cut between 10,000 and 15,000 jobs in its consumer and business services divisions, says a person close to the company.

The cuts, unlike AT&T's recent voluntary buyout offers, are said to be layoffs, with some business services operations expected to lose as much as 20% of their staff. While the consumer services arm has taken the most severe cuts in recent years -- 7,000 consumer-unit workers were

laid off last year -- the business services staff has remained mostly intact. AT&T has 162,000 employees, with 30,000 in business services and 16,700 in consumer long distance.

AT&T officials say they don't plan any cuts. But a person familiar with staffing decisions says June is generally when AT&T assesses its size and plans adjustments. "Those cuts generally come in autumn, but if they're concerned by what they are seeing now, they might be moving more quickly," says the person.

Talk of cuts at AT&T comes amid a rash of firings across the telecommunications industry, most notably in the networking equipment sector. Friday,



set plans to lay off 10,000 workers on top of the 20,000 cuts it had already made, bringing staffing some 30% below last year's levels.

AT&T, which has an analyst meeting scheduled for Friday, fell 28 cents Monday to $20.72.

Shown the Dorman?

People inside and outside the company say AT&T President David Dorman is administering the layoff plan as he attempts to bring costs in line with falling revenues. Dorman, who previously headed


, an international partnership between AT&T and

British Telecom


, has been retooling the business services division since he arrived in November.

Going Nowhere Fast
AT&T stock over a year

Cheap rates, wireless calling and email have all contributed mightily to what has been a dramatic two-year-long slide in revenues at AT&T's core long distance business. That pressure, combined with the high costs of building new cable systems and wireless networks, has caused CEO C. Michael Armstrong to advocate breaking the company into four parts: consumer, business, cable and wireless. The breakup should take effect later this year.

Armstrong placed the consumer and business divisions under Dorman. Last month, Dorman realigned the business services unit and put Ken Sichau in charge of the consolidated operations. The move effectively made AT&T Solutions, the company's network management arm, part of AT&T Business Services.

A spokesman at Denver-based AT&T Broadband, the largest unit with 48,400 employees, said he was unaware of any pending cuts.