NEW YORK – SBC Communications Inc. (SBC) said Tuesday it expects to eliminate about 13,000 jobs after its $16 billion acquisition of AT&T Corp. (T) closes, but the telephone company emphasized that many of those positions can be cut through attrition rather than layoffs.
The projection came during an occasionally heated meeting with investors a day after SBC announced plans to acquire AT&T, its former corporate parent, a deal that would create one of the world's biggest telecommunications companies on numerous fronts.
The cuts would come in addition to existing plans at the two companies to eliminate at least 12,000 jobs before the merger is finalized at least a year from now.
San Antonio-based SBC had recently indicated it would cut about 7,000 positions from its work force of 163,000 during 2005, primarily through attrition, which executives said typically total about 1,000 a month.
AT&T, based in Bedminster, N.J., had already planned to eliminate at least 5,000 of its 47,000 jobs this year, though those cuts likely will involve layoffs in the customer call centers which the company plans to close as it retreats from the traditional consumer phone business.
SBC said the operations which would have excess staffing following the merger included 5,100 from sales, order provisioning, network management, billing inquiry, and customer support. The company did not, however, outline all of the expected cuts.
Overall, work force reductions will generate nearly 60 percent of the cost savings that the merger is expected to generate, SBC executives said in the presentation.
Those savings are expected to accelerate from between $200 million and $600 million in 2006, depending on when the deal close to between $1.1 billion and $1.6 billion in 2007. Annual savings could exceed $2.4 billion in 2009, the executives said.
The meeting included some prickly suggestions from analysts and money managers suggesting AT&T had sold itself too cheaply despite its rapidly deteriorating business.