(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. 

“We do believe we have a moral responsibility to keep porn off the iPhone.” -- Steve Jobs
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