AT&T Will Cut 5,000 Jobs, Take $374 Million Charge

NEW YORK -(Dow Jones)- AT&T plans to cut 1.5% of its work force, or 5,000 jobs, resulting in a first-quarter pretax charge of $374 million.

The San Antonio telecommunications giant, however, said the reductions wouldn't reduce its overall work force because of new hires.

"This is part of our ongoing evaluations to streamline the business," said spokesman Walt Sharp. "It's about having the right people in the right job."

AT&T's various unions aren't expected to take issue with the cuts because they are mostly at the manager level. Over the past several years, the telco has dealt with the integration of AT&T Wireless, the original AT&T, and BellSouth Corp. The move is expected to help the company operate more efficiently, the company said in a filing with the Securities and Exchange Commission.

The cuts are across the company and country, and aren't relegated to any particular business, Sharp said.

At the end of the year, AT&T employed 309,000 workers. It hired 7,000 workers last year. Sharp declined to provide a forecast for the number of workers expected to be added this year.

AT&T is shedding workers in its slower businesses, including its traditional landline operations. Many of the jobs are in non-customer-facing areas.

"We're always hiring for the growth areas," Sharp said, noting that the company was seeking talents in areas such as wireless and U-Verse, its Internet TV service. "We're shifting headcount to areas where the customers are."

The cuts shouldn't be taken as an indication of weakness in the business, he said.

Shares of AT&T traded recently at $38.09, up 1.4%.

-By Roger Cheng, Dow Jones Newswires; 201-938-2020; roger.cheng@dowjones.com

(Gee L. Lee contributed to this story.)

(END) Dow Jones Newswires

Posted to the site on 18th April 2008