AT&T Co will have reduced its headcount in the US by 25,000 by the end of this year, by attrition, hiring freezes and unannounced lay-offs, and at least 8,500 jobs, and likely many more, are to go next year. The company has announced plans to cut 6,000 jobs in its 37,600 Network Services division next year, 700 are to go from the 15,000-strong Business Communications Division, and the 8,700-strong Material Management & Services unit is to lose 1,400 people. AT&T Network Systems, with 60,000 employees and Microelectronics with 16,000 have yet to report their cost-cutting plans for 1990. The company has already warned that 1989 job cuts may lead to a $150m charge against pre-tax profits for the current quarter, which may be offset by the gain on the sale of its Olivetti shares. The latest reduction is expected to cut $1,000m off the overhead in the long distance operations, where AT&T’s share has fallen below 70% of the market, against over 90% at the time of the break-up of the Bell system five years ago, but analysts say it needs to cut about another $1,000m off the $32,000m annual overhead to bring its cost structure down to that of its fiercest rival MCI Communications Corp.
