Communications giant AT&T has announced it is planning to cut roughly 12,000 jobs from its global workforce, an overall reduction of about four percent. The cuts will start this month and continue throughout 2009, and the company estimates it will take a one-time charge of about $600 million in the fourth quarter of 2008 to handle employee severance and other costs incurred by the layoffs.
The job cuts add AT&T to the growing roster of tech companies shedding jobs. AT&T’s announcement comes just as Viacom announced it planned to trim about 7 percent of its overall workforce, and software maker Adobe Systems said it plans to lay off about 600 employees.
The job cuts are a move to reduce the company’s costs and expenditures as it tries to weather the global economic downturn. The company says that while it is cutting jobs in some areas, it is still adding employees in other areas, like wireless, broadband, and video services. Some of the employees impacted by the job cuts have a guaranteed job offer under union contracts; it’s possible they will simply shift to other areas of the company rather than leave AT&T entirely…but there’s no telling if the new job offers will in any way compare to the positions being eliminated.
AT&T also plans to lower its 2009 capital spending from 2008 levels; the company says it will outline its plans in late January, and the details are still being nailed down.
AT&T has seen its share price drop by nearly a third during 2008, as the company has faced increasingly difficult economic conditions and a continual erosion of its installed base of landline telephone customers. The company has been shifting toward mobile and Internet-based revenue streams—and the Apple iPhone has significantly boosted the company’s pool of mobile subscribers, even while eating away at profit margins due to heavy subsidies.