AT&T sees 10,000 job cuts after BellSouth deal

[SOURCE: Reuters, AUTHOR: Sinead Carew]
AT&T expects to cut 10,000 jobs by 2009 following its $64.5 billion acquisition of BellSouth, in an effort to reduce costs and help it compete in the telecoms sector. AT&T's purchase of BellSouth will bring their joint venture Cingular Wireless under one roof, giving the combined company a wider array of services to combat wireless rivals and cable television companies. AT&T hopes to improve its financial position with headcount savings, which it said would represent about 40 percent of a total $18 billion of cost reductions it expects to get from the deal. It also plans ad spending cuts. While some analysts said AT&T may have overpaid for BellSouth, they were pleased with the savings targets and financial guidance. The new job cuts are in addition to 13,000 jobs that AT&T had already planned to cut in the next three years as a result of its November merger with SBC Communications. Job cuts from both mergers would leave the company with about 7 percent less workers than their combined workforces today. Other savings would include cutbacks of as much as $500 million in annual spending on advertising as the company moves to a single AT&T brand from the current three separate brands, including Cingular, its wireless venture with BellSouth.
http://today.reuters.com/news/newsArticle.aspx?type=domesticNews&storyID=2006-03-06T230917Z_01_N06253034_RTRUKOC_0_US-TELECOMS-ATT.xml&archived=...

* CWA Calls Proposed AT&T-Bell South Merger Critical Opportunity for U.S. and Telecom Sector
"Today's announcement that AT&T will acquire Bell South has enormous implications for CWA- represented employees, millions of customers of both companies and the entire industry. It is an opportunity for change in the telecom sector that if carried out properly, could make a great stride in fulfilling the promise of technology and high speed communications for all citizens. This proposed acquisition of Bell South could not have come at a more critical time. The United States has slipped from leading the world's economies in telecom services to 16th, and likely will fall to 18th in the weeks ahead. Policy makers and regulators in the United States continue to define universal service based on voice dial tone, while the 18 nations in front of us define it in terms of universal broadband deployment. U.S. policy has not even clarified basic standards for U.S. broadband speeds and is lagging behind the rest of the world. The global standard is now 10-100mbs, while in the United States, even a speed of 500 kbs can be described as broadband. This can only push our nation further behind. CWA hopes that this announcement will mean a new day for U.S. policy makers, consumers and workers in this industry. We need to make sure that government, policy makers and citizens truly grasp the promise of this industry. Equally important is that our potential to regain the global lead in communications services as the backbone of our economy not simply be an adjunct to entertainment for the rich and upper middle class. We look forward to discussions with AT&T and Bell South management about this merger in terms of the career opportunities for the nearly 200,000 CWA represented employees at AT&T, Bell South and Cingular affected by this announcement. The time for change is here, but we need to ensure that change is beneficial to our members and the communities and customers they serve."