Human Capital & Careers

A Mega-Deal with Job Cuts to Match

SBC Communications plans to eliminate about 6 percent of the 210,000 positions at the combined SBC-AT&T.
Stephen TaubFebruary 2, 2005

While bullish investment bankers and investors celebrate the renaissance of the mega-deal, the rank and file at the companies in the headlines are quickly discovering a downside to this renewed activity.

SBC Communications Inc. announced it will cut about 13,000 jobs after its closes on its $16 billion acquisition of AT&T Corp., according to wire-service reports. SBC executives stated that they hope to cut $2 billion by eliminating redundant jobs and facilities. About 60 percent of that annual saving would come from job cuts, although the company stressed that many cuts would probably come from attribution and not layoffs.

San Antonio-based SBC currently employs 163,000 people, according to wire services; AT&T, headquartered in Bedminster, New Jersey, employs 47,000. The newly announced cuts would eliminate about 6 percent of the 210,000 positions at the combined company.

About 5,100 job cuts will probably come from management of the long-distance and local networks, according to the Associated Press, and 5,100 positions would be pared from sales, order provisioning, billing inquiry, and other forms of customer support. Another 2,600 or so jobs would be eliminated from administrative areas such as human resources, regulatory operations, and lobbying operations.

These reductions are in addition to 12,000 positions — 7,000 at SBC and 5,000 at AT&T — that the two companies had planned to eliminate before the merger was announced.

Meanwhile, Procter & Gamble, which is buying Gillette Co. for $57 billion, expects to cut 6,000 jobs, or 4 percent of the combined workforce of about 140,000.

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