As the Baby Bells dial up job cuts, the widely awaited telecom recovery is looking more and more like a long distance call.

Less than a month after reducing sales expectations for the year,

BellSouth

(BLS)

said Friday it will cut between 4,000 and 5,000 jobs to help reduce costs because of continued weakening in the economy and tougher pricing regulations. BellSouth has 86,000 workers.

The cuts are merely the latest sign that the telecom recession is nowhere near abating. Moreover, the spreading job cuts at the regional Bell operating companies -- among the only telcos to have avoided the plague of meltaway stock prices during the 2002 telecom shakeout -- show that even these monopolists are far from immune from the various maladies laying the market low. BellSouth fell 31 cents Friday to $33.19.

Assigning the Blame

The Atlanta-based local phone service giant is the second regional Bell this week to blame the economy and regulators for a recent round of firings.

SBC

(SBC)

said Tuesday that it was

firing 5,000 more workers in the wake of a Supreme Court ruling that enforces lower network leasing prices to Bell rivals.

Just a month ago, BellSouth ratcheted down its 2002 forecasts for the second time this year, saying it expected revenue growth of 1%, compared with its previous estimates of a 3% gain. The telco also said earnings per share would be between $2.36 and $2.43, compared with prior guidance of $2.41 to $2.46.

The Baby Bells have been the strongest companies in a weakened sector because of their dominance within regional borders. But for the past year, with the economic slump and more customers using cheap wireless minutes, the Bells have been losing ground. Revenue growth has all but stalled as the number of local lines continues to decline, and the companies have failed to offset the sluggish performance of their core business with hearty growth from new services like fast Net access.

Bracing

Only halfway through the quarter and already some investors and analysts are bracing for another round of dismal financial results from the big phone companies.

Last month

Verizon

(VZ) - Get Report

, the nation's largest phone company, cut its 2002 sales growth target to 1% from 3% and consequently cut its network spending by $1 billion. Verizon also said it plans to eliminate the equivalent of 10,000 jobs by year-end. A Verizon spokesman said he was unaware of any plan to increase that cut target.

But judging by the telcos' continued sales deterioration, the scores of investors who flocked to the Bells for cover aren't going to find much safety in the sliding numbers.