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  (Source: Public Justice)
Telecom giant AT&T makes deep cuts despite some sales success

The long-time best selling phone in America, Motorola's Razr has been supplanted by Apple's iPhone, which is only available through AT&T.  With Apple and AT&T in a lucrative contract and quickly growing the smart phone market share, all that surely spells strong performance from AT&T right? 

Not necessarily -- AT&T announced today that it would slash 12,000 jobs, roughly 4 percent of its workforce.  It cited the bad economy as a major cause, saying that it was cutting the jobs due to "economic pressures, a changing business mix and a more streamlined organizational structure."

The Dallas-based company joined the recession parade as the latest company to announce major layoffs.  The company, like other telecoms, has been hit not only by the poor economy, though, but also customer defection from land lines.  AT&T has not said which parts of the company will be receiving cuts, but it has said it will continue to hire at a slower pace for its cell phone service and broadband Internet access divisions.  This indicates the cuts will likely come from its wireless and land line divisions.

The company will take a charge of $600M USD to cover the severance benefits of the employees laid off.  Some employees may not be able to be laid off due to union contracts.  AT&T pledges to deliver severance "in accordance with management policies or union agreements."

It will be a bleak Christmas for many AT&T employees as the company will start its layoffs in December and continue them into early 2009.

Other phone companies have announced smaller layoffs.  Sprint announced 4,000 jobs would be cut in January.  However, the news from AT&T strikes some as more surprising as Sprint has been perceived as struggling, loosing cell phone customers, while AT&T has been showing strong growth, at least in its cell phone division. 


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Land lines malarky
By wordsworm on 12/4/2008 10:54:50 AM , Rating: 2
I don't buy this argument for a second. Corporations aren't giving up their landlines. They just added cell phones to the mix. What with all the Internet lines in so many homes, seems to me that there should be more lines in America than 25 years ago before Internet hit the masses.

It's just their way of trying to justify the layoffs without making it evident that the Grinch runs the company.




RE: Land lines malarky
By JasonMick (blog) on 12/4/2008 10:58:30 AM , Rating: 3
Yes, but government studies show that home land lines are dying off and being replaced with cell phones. With no (or little) net growth on the business side and a net decrease on the consumer side the land line business certainly is on the losing end of the stick.

Check out the linked article on "Slow Death of the land Line", which I wrote, for more info. It cites the government survey I'm talking about and gives the numbers.


RE: Land lines malarky
By Motoman on 12/4/2008 11:18:52 AM , Rating: 2
Granted I didn't do the research on this article, but it seems more likely to me that businesses are switching to IP phones while ditching traditional land lines...I don't see mobile phones occupying the same space.


RE: Land lines malarky
By Denithor on 12/4/2008 2:02:24 PM , Rating: 3
quote:
Granted I didn't do the research on this article, but it seems more likely to me that businesses are switching to IP phones while ditching traditional land lines...I don't see mobile phones occupying the same space.


Yep. The last two companies I've worked for have done exactly that. The first was a really @$$ backward low-tech place that saw the light when Timewarner/RR came through to set up high speed internet (about four years ago, they joined the new century only five years behind everyone else) and they realized they could save money by switching.

The company I work for currently set up a new office where I'm based and didn't even bother with landlines, they just wired for IP phone system to start with and provide cell phones also to those who travel a lot.


RE: Land lines malarky
By wordsworm on 12/4/2008 12:32:06 PM , Rating: 2
I think that my point was, despite the fact that many people are ditching landlines for the use of telephones in favor of cell phones (I myself haven't gone with a landline for more than 6 years), they are also using lines for the Internet. This, of course, doesn't include the amount of additional landlines that have been put into businesses for the purpose of Internet access. In businesses, I can't see them forsaking the landline. The landline is still very much a part of their business. Sure, some companies that are on the road for the most part are still going to shun those, but I don't see these as being anywhere near a majority. Overall, I cannot believe that there are less lines being paid for, tallying Internet and telephone technologies, than there were prior to the mass adoption of cell phones. I believe that they are simply using this statistic that you have brought up as an excuse. This move, I believe, is purely profit motivated, and the current economy along with the diminishing use of land based phone lines are merely the excuse to recuse them from subsequent public disgust.

In plain-speak: it's a conspiracy!


RE: Land lines malarky
By itzmec on 12/4/2008 4:08:59 PM , Rating: 2
what the hell are you talking about?


RE: Land lines malarky
By StevoLincolnite on 12/4/2008 11:45:33 AM , Rating: 2
True many people do keep the home phone line active just for ADSL services alone, however with Naked ADSL around people are finding it cheaper to go with Naked ADSL + VOIP options which works out cheaper in the end. - This is what I have witnessed here in Australia anyway, might be different in a country that has extensive Cable based technology's abound.


RE: Land lines malarky
By BZDTemp on 12/4/2008 1:41:44 PM , Rating: 2
You are mistaken. Sure many places are just adding mobile phones but there are also lots of places which move to IP telephones meaning a lot less land lines and switch boards + phones integrated with the companies LAN. Plus, while you may not see it, there are plenty of companies moving away from land lines all together.

Here in northern Europe we are perhaps a little a head in the mobile communication department but I know people who has no land lines. They use only mobile connections for everything.

If you're not a heavy internet traffic user then a 3G data connection is a real alternative to something like ADSL both speed and price wise . And as for mobile phones who needs a land line when mobile is cheaper :-)


? for CEOs.
By Chadder007 on 12/4/2008 1:20:18 PM , Rating: 2
With all of these easy to implement and popular to CEO job layoffs even when a company is still doing well....who do you think will be left with a job to purchase your companies product?




RE: ? for CEOs.
By FITCamaro on 12/4/2008 2:19:28 PM , Rating: 2
Agreed. Companies seem to forget this. As long as employees have work to do and the company is making a profit, there shouldn't be layoffs.


RE: ? for CEOs.
By flydian on 12/4/2008 4:26:33 PM , Rating: 2
But we can cut jobs, pile that work on the people we keep (at the same pay), and remind them how lucky they are to have a job in this economy (which should shut them up). This will result in an increase to our profit margins, thus increasing my bonus, and allowing me to purchase my seventh home (outside the country of course). I'm thinking Barbados...


Start With...
By DtTall on 12/4/2008 10:41:26 AM , Rating: 2
Start with all of the stupid mall kiosks. Cell phones are so prevalent in America (and the world) that I can't believe that all of those people pay for themselves. Every time I see them they are just surfing the web or playing solitaire.

They were great and needed to get cell phones main stream. Now I think they need to pull back a little. My guess is that is where they will be cutting jobs.




RE: Start With...
By RU482 on 12/4/2008 1:05:27 PM , Rating: 2
what rock do you live under?
Do you really think those kids working in the mall stores/kiosks are At&t employees?


RE: Start With...
By Rhl on 12/4/2008 5:19:52 PM , Rating: 1
Exactly. Most of the mall kiosks are (As far as I know) unofficial, and not under AT&T jurisdiction. That's probably why they're allowed to act like such douchebags. I've been called stupid by a mall kiosk employee before. Fuck those guys.

(Ignore the fact that another time I attempted to bait the hot chick working at one to give me her phone number in exchange for listening to her spiel. ;) )


Growing market
By Dreifort on 12/4/2008 12:16:01 PM , Rating: 2
Chad! You're still a ding-dong!

I wonder how soon it will be before the wireless industry cries for a bailout.

"We just sold 2,000,000 iPhones, but we can't buy more inventory unless the government gives us $2Billion to buy more!"

If Ford, GM, etc go under - we still have cars imported from abroad to purchase and drive around in. But if the wireless companies go under? Who will own and/or maintain the cell phone towers? Will that become a government agency? Then every 6 mos, you're phone conversations will be interrupted with a very important announcement from Obama urging you to vote for a Democrat running for office in some small town. Oh, and don't forget to go down to your local city hall to do the required registration for the voluntary civil service...

or worse yet, Hugo Chavez buys up all the towers and raise your cell phone bill every month until the price reaches $1,000/mo.




RE: Growing market
By dflynchimp on 12/4/2008 12:36:11 PM , Rating: 1
Your linking an article regarding phone company layoffs to democratic policies is about as far fetched as they come. Seriously can we avoid straying into redvsblue flame wars here?

Other than that, I agree with your on topic portions of the post. I'm against the car company bailouts, but telecommunications is a vital part of the nation's economy and security. It's too sad that AT&T has joined in the mass layoffs. At this point in time the companies should really think about just balancing out and staying out of the red instead of pushing for profits by layoffs. Too bad stockholders > employees in their priority books.


RE: Growing market
By Dreifort on 12/4/2008 2:00:24 PM , Rating: 2
I was actually making light of AT&T's huges iPhone sales and growing cell phone market. so much growth they would ask for a bailout (regardless what another AT&T market division may be doing). Automobiles play a huge part of our economy as well. It just seems replaceable (with overseas imports) so it gets less attention.

There was an article I saw the other day where a ball bearing company sold their company to a Swedish company (another topic of America losing business growth to other countries), but anyway, the company owners took the money received from the sale of their company and gave a large protion of the profits back to their employees as a yearly bonus, some receiving as much as a $40,000 check. A total of $6.4M was paid out to employees.

You won't see that kind of employee love from telecomunication companies, unless it's upper management love. You think the financial industry has over compensated execs? lol. Look at telecom (and wireless).

Auto makers can't give that kinda love to employees because of union regulations.


sprint
By RoberTx on 12/6/2008 4:17:14 AM , Rating: 2
I just switched to Sprint and got the same amount of minutes as ATT but at 1/3 the cost.




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