AT&T To Slash 12,000 Jobs

AT&T's job cuts are planned to begin this month and continue throughout 2009. The move is aimed at reducing AT&T's capital expenditures for 2009 to levels consistent with what the company incurred in 2008.

AT&T plans to take a charge of $600 million in the fourth quarter to pay for employee severance packages.

AT&T had no comment.

But while 12,000 employees of the company are on the chopping block, the company plans to add jobs in other segments of its business. The three specific areas mentioned by the company are wireless, video and broadband.

Presumably these areas will continue to expand because consumers are demanding more and continue to spend money on the services, albeit at a somewhat reduced rate. It is likely the majority of the layoffs will affect parts of the company offering less modern services, such as the long-distance segment. Reducing the number of employees working on a product that is in decline while hiring staff devoted to newer technologies would be in line with AT&T's pledge to streamline and change the business.

AT&T plans to release more details about its plans when it announces its fourth-quarter results early in 2009.