Pressured by the economic turmoil and the mounting loss of traditional phone customers, AT&T Inc. is cutting 12,000 jobs nationwide — about 4 percent of its work force — but the extent of job losses in Middle Tennessee isn't clear yet.
"It's deep, no doubt about it," said Rick Feinstein, president of Local 3808, an affiliate of the Communications Workers of America union in Nashville. Feinstein said local union officers should find out in 10 days about the extent of possible cuts in Tennessee, former home turf of AT&T's predecessor company, BellSouth Corp.
Thelma Dunlap, state director of the Communications Workers of America here, said the union's contract with AT&T requires the company to detail how many workers it views as "surplus" by Dec. 15.
She expects losses to be shared nearly equally by line workers in sales and service, as well as by managers and others who hold non-union jobs with the telecommunications giant. Dunlap said she expects 7,000 of the cuts to be union-affiliated jobs and as many as 5,000 to come from management ranks. AT&T hasn't confirmed those numbers.
"We were all concerned something was about to happen and that forced adjustments were inevitable," she said. Feinstein said he hopes the fact that AT&T is about to roll out its digital U-Verse television product in Tennessee is the "saving grace" that reduces job losses here. AT&T operates in 22 states, including Tennessee.
AT&T, based in Dallas, said the cuts would begin this month and run throughout 2009. The company also plans to lower its capital spending next year, and one analyst estimates that reduction could be as much as $2 billion.
The 300,000-person company has announced layoffs several times over the past few years, including in April, when it said it would eliminate 4,600 jobs, but it has been hiring at the same time. This is the first time since the company bought BellSouth in 2006 that it said overall staffing would decline.
"AT&T is concerned about service to the customer and it needs employees out there every day … in the field," Feinstein said. "Because of that I don't believe it is going to be too deep on the crafts side of the house (that includes sales, service and repair jobs)."
Landlines declineAT&T, which provides local phone coverage in California, Texas and 20 other states, also is being pulled by another current: the long-term trend of people defecting from landline phones to wireless services or phone service from cable companies.
In the last quarter, the number of AT&T's basic voice lines in service dropped 11 percent. Its wireless customer base, meanwhile, grew 14 percent.
Reflecting that "changing business mix," the company said it still plans some hiring in 2009 in parts of the business that offer cell phone service and broadband Internet access.
The shift away from landlines has accelerated because of the economic turmoil, said Christopher King, an analyst with Stifel Nicolaus. Fewer home purchases mean fewer landlines get installed or transferred. And more people are disconnecting as consumers try to save money or rely exclusively on cell phones.
AT&T spokesman Walt Sharp said the layoffs will be "across the company and across the country," but would not specify what departments and cities would be most affected.
King expects most of the lost jobs to come from the company's landline business. But he said some also might come from the unit of the company that serves large businesses and accounts for about 30 percent of AT&T's sales. Companies have been cutting back spending because of the recession, and this, King said, will "certainly pinch" AT&T's revenue growth.
AT&T shares are down about 30 percent on Wall Street this year — while the Dow Jones industrial average is off 35 percent.
But the telecom leader remains profitable. Rival Sprint Nextel Corp. has been hemorrhaging wireless subscribers and has seen its shares lose 80 percent of their value this year.
Last month, Sprint said it is offering voluntary buyout packages to an unspecified number of its 57,000 workers.
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