AT&T to cut 2% of workforce; save $200 million annually
07:03 PM ET 04/30/99
AT&T, union in talks over proposed job cuts
By Nicole Volpe
NEW YORK, April 30 (Reuters) - AT&T Corp. plans to
cut 2,400 to 3,000 technicians jobs, about 2 percent of its
total workforce, in a bid to save the No. 1 U.S. phone company
$200 million a year, the technicians' union said Friday.
The Communications Workers of America, which began talks on
the matter with AT&T on Thursday, said in a statement that the
planned cuts represent half or more of all the skilled
technicians who monitor and maintain AT&T's network.
An AT&T spokesman confirmed the general range of job cuts.
"That sounds like a ballpark," AT&T spokesman Burke Stinson told
Reuters when asked about the figure cited by the CWA. AT&T
employs about 140,000 people worldwide.
The CWA accused AT&T of jeopardizing the quality of its
network as it moves to become a player in the cable TV industry
through acquisitions of major cable system operators. AT&T is now
the No. 2 cable company after acquiring Tele-Communications Inc.
and has launched a $58 billion unsolicited bid to buy MediaOne
Group Inc., the nation's third largest cable company.
"By cutting the jobs of the skilled employees responsible for
the high quality service customers have come to expect, AT&T is
degrading the quality of its network, the morale of its
employees, and above all, a reputation that has made it among the
most profitable companies in the industry," the union said in its
statement.
"When AT&T purchased cable giant Tele-Communications Inc., we
hoped that AT&T would elevate the inferior quality of the cable
companies," the CWA said. "What we didn't expect is that AT&T
instead would lower its own standards as it continues to invest
tens of billions of dollars in an effort to dominate that
industry."
Stinson disagreed with the union's contention that the move
would harm network quality, calling the accusation "union
rhetoric."
"A lot of that work has been mechanized and computerized," he
said.
AT&T does not expect to take any charges for the job cuts,
which Stinson said would primarily effect the technicians who
service the company's telephone network. Departures could begin
as early as this summer, he said.
The jobs at issue are spread out through most states, with
two major centers in Georgia and Texas, Stinson said. The
company's current proposal involves offering voluntary buyouts,
with severance packages topping out, depending on seniority, at
up to 104 weeks pay.
"Those are things that are already in our contract, those are
things the union has already won," said CWA spokeswoman Candice
Johnson.
Stinson acknowledged there were aspects of the company's
proposal that went outside of union contract parameters, but he
declined to specify what they were. "If anything, they'll make
the offer more attractive," he said.
AT&T last week said it expected more cost cutting to follow
its projected $2 billion in expense reductions next year, but did
not provide any details. It announced the cost cuts at the same
time it unveiled its bid for MediaOne .
Stinson could not say how long talks might last. "We barely
have our toe in the tub here," he said.
Johnson said the union was not currently considering any
actions other than negotiations with company executives.
"We're still trying to sit down with the company to see
what it is they are trying to do," she said.
((--New York Newsdesk (212) 859-1700))
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