AT&T to cut 12,000 jobs

AT&T Inc., the largest American phone company, will cut 12,000 jobs and reduce spending next year, striving to become leaner as the US economy falters. The company said the ''planned reduction'' would occur in December and throughout next year.

The reductions amount to about 4 per cent of the workforce, and will lead to $600 million in severance expenses this quarter, Dallas-based AT&T said today in a statement. 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. The company plans to give specific forecasts for 2009 spending in late January.

It cited economic pressures, a changing business environment and the need for a more efficient organizational structure. AT&T said the staff cuts would start in December and would continue throughout 2009. It also forecast a reduction in capital expenditures next year. In a statement, AT&T added that, despite the cuts, it would continue to create jobs in other parts of the business, such as wireless, video and broadband.

In April, AT&T announced 4,650 cuts, some in its home-phone business, which has lost customers to cable operators and wireless competitors. Verizon Communications Inc. and Sprint Nextel Corp. also have cut jobs to trim expenses. (See: Sprint plans to cut thousands of jobs: report)

The carriers are competing for a smaller pool of new customers as more people use mobile phones. Wireless penetration has reached 84 per cent in the US, according to wireless industry association CTIA.

They also have to contend with slowing growth for so-called smart phones, which are equipped for high-speed Internet use. Researcher Gartner Inc. said smart-phone growth ebbed last quarter to 11.5 per cent, the lowest level since the researcher started tracking it.