New York (NY) – Citing the strong economic downturn, AT&T announced today it will lay off 12,000 workers between now and the end of 2009, according to AP, roughly 4% of their work force. These cuts come on top of a previous 4,600 workers AT&T announced they would cut back in April. They will also reduce capital spending in 2009. While the layoffs will be company wide, the AP report suggests that as more and more telephony users switch from wired to wireless, the areas affected may relate more to land-based calling technology. AT&T has seen a decline of 11% in landline users just this past quarter.
Still in the black
AT&T remains profitable, even though its stock price has declined by 30% this year. The company will also continue hiring new employees, even during the reduction. These will be in the area of cell phones and broadband Internet access.
It will cost AT&T approximately $600 million in severance packages this quarter as the cuts begin to take effect. According to company statements, “All affected workers will receive severance in accordance with management policies or union agreements.” Many non-executive employees have “guaranteed jobs” due to union contracts.
The attrition rate equates to one employee fired every every 15 minutes 36 seconds between now and the end of 2009.
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