SBC to cut more than 10,000 jobs

Justin Hyde

WASHINGTON: SBC Communications may shed more than 10,000 jobs from its workforce through the end of 2005 using attrition and involuntary cuts, the company said in a filing with U.S. market regulators.

If the company were to cut 10,000 jobs that would be equal to about 6 percent of the current workforce at SBC, the second-largest U.S. telecommunications company. SBC said in its filing that it has cut about 7,000 jobs over the past year, mostly through attrition.

Lehman Brothers analyst Blake Bath said in a research note that SBC might reduce its workforce by 10,000 to 20,000 to bring its costs in line with those at other dominant local telephone companies, such as Verizon Communications Inc.

Bath said such cuts could save $600 million to $1.2 billion in annual costs.

The telecommunications industry has shed thousands of jobs this year due to regulatory decisions and growing cost pressures. Many of the cuts have been focused in customer service or technical work that has either been automated or eliminated, such as telemarketing barred by the federal "Do Not Call" law.

The "Baby Bells" such as SBC and Verizon have also sought to reduce jobs in their traditional landline telephone business as customers shut those lines off in favor of wireless or cable services.

Outplacement firm Challenger Gray and Christmas Inc. said earlier this week that telecom companies announced 16,664 job cuts in October, more than any other U.S. industry and the third straight month of increased cuts.

SBC had said earlier it might cut up to 1,000 jobs in Michigan as it consolidates work in call centers. SBC spokesman Walt Sharp said most of the cuts would come through attrition, which averages 1,200 jobs a month at the company, and that SBC would guarantee job offers to union employees as promised under its new contract.

Sharp said that the company has been clear about the need to trim its workforce, shedding about 16,700 jobs over the past two years. "This has been an ongoing process, and has been for the last three or four years," Sharp said. "Each quarter management has indicated that, that is a necessary and ongoing process, and it will continue."