Dec 4, 2008 1:02 pm US/Pacific
AT&T To Cut 12,000 Jobs
NEW YORK (CBS News) ―
AT&T Inc. joined the recession's parade of layoffs Thursday by announcing plans to cut 12,000 jobs, about 4 percent of its work force.
The Dallas-based telecommunications company - the United States' largest - said the job cuts will take place in December and throughout 2009.
It was not immediately clear what departments and cities would suffer the cuts. However, like most telecom companies, AT&T has been seeing many customers defect from landline phones to wireless services, and the company noted that it would still be hiring in 2009 in parts of the business that offer cell phone service and broadband Internet access.
The company also said it plans to reduce capital spending next year.
AT&T plans to take a charge of about $600 million in the fourth quarter to pay for severance costs. The company noted that many of its non-management employees have guaranteed jobs because of union contracts. All affected workers will receive severance "in accordance with management policies or union agreements," the company said.
The announcement tempered news that unemployment dropped in the last week. The Labor Department said Thursday initial claims for benefits fell to a seasonally adjusted 509,000, from a revised 530,000 for the previous week. The latest figure is significantly below analysts' estimates of 537,000, according to a survey by Thomson Reuters.
(© 2009 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)
Timeline: U.S. Credit Crunch & Financial Failures
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