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Technology Stocks : AT&T -- Ignore unavailable to you. Want to Upgrade?

To: Phil(bullrider) who wrote (1354)	6/3/1998 1:55:00 PM
From: m thompson	Respond to of 4298

from wsj: June 3, 1998 AT&T Says Staff Reduction Is Going Faster Than Expected Dow Jones Newswires NEW YORK -- At least 3,000 more AT&T Corp. managers than expected have opted for voluntary retirement. As a result, the telecommunications giant will have to increase its planned charge for the program, but says the charge will be offset by the sale of businesses. AT&T said Wednesday that at least 14,000 managers will leave the company under its voluntary-retirement plan. The company had expected between 10,000 and 11,000 managers to volunteer. Chairman C. Michael Armstrong said in a prepared statement that the program's popularity put AT&T a year ahead of schedule in its plan to reduce its total work force by up to 18,000 people over two years. The voluntary-retirement plan, which boosted pensions by 20% and expanded benefit eligibility, was announced in January. Estimating that 10,000 managers would take advantage of the retirement offer, the company expected to take a charge of $800 million to $1.2 billion in the second quarter. It will have to increase that figure, but says it still expects the charge to be more than offset by the sale of businesses and reaffirmed its 1998 earnings target of $3.25 to $3.35 a share. A First Call consensus of 24 analysts predicted earnings of 73 cents a share for the second-quarter of 1998 and full-year earnings of $3.28 a share. AT&T earned $959 million, or 59 cents a share, on revenues of $13.17 billion in the second quarter of 1997. The company earned $4.47 billion, or $2.75 a share, from continuing operations for all of 1997. AT&T previously estimated it would save about $700 million in 1998 as a result of the work force reductions. That estimate may be increased now, as well. The company said the reduction effort also calls for phasing out 5,000 to 7,000 other management and nonmanagement positions over two years, largely through attrition and previously announced job cuts. The reduction of its work force is part of the company's plan to reduce selling, general and administrative expenses to 22%, from 29%, of revenue by the end of 1999. AT&T expects to decrease such expenses by $1.6 billion in 1998. Most managers who leave under the voluntary program will retire this year. Departures will be staggered to ensure a smooth transition of work, AT&T said. The company ended the first quarter with 121,000 employees, including 62,000 managers. AT&T began the year with nearly 126,000 employees.