Top US phone company AT&T said today it would eliminate 12,000 jobs, about 4 per cent of its workforce, as it joins a raft of corporations trying to slash costs in the face of the economic downturn.
AT&T will cut the jobs over the remainder of 2008 and 2009, and take a charge of about $600 million in this year's fourth quarter for severance.
The carrier plans to cut its 2009 capital spending from this year's levels, though actual spending plans have not yet been finalized. AT&T said it would provide details on its capital spending in late January.
Shares of AT&T were down 2.5 per cent in pre-market trade following news of the job cuts, which the company attributed to "economic pressures, a changing business mix and a more streamlined organizational structure."
Shares of AT&T have dropped by about 30 per cent so far this year, as the company has looked for ways to make up for the rapid decline in traditional wireline customers. To help, it has increasingly turned to wireless and high-speed Internet services.
Indeed, its iPhone has given the carrier a big boost in subscribers, although those sales have hurt profit margins as AT&T offers subsidies on the phone.
In a statement today, AT&T said that while it is cutting its overall workforce, it is adding jobs in areas such as wireless, video and broadband.
AT&T is just one of several companies announcing job cuts today. Viacom said it would eliminate 7 per cent of its workforce, or 850 jobs. Swiss bank Credit Suisse said was cutting 11 per cent of its workforce, or 5,300 jobs.