NEW YORK (Reuters) – Top U.S. phone company AT&T Inc. said it would eliminate 12,000 jobs, or about 4 percent of its workforce, a fresh wave of cuts to cope with an economic downturn that has exacerbated a decline in traditional phone sales.
AT&T said on Thursday it will cut the jobs over the remainder of 2008 and 2009, and take a charge of about $600 million in this year's fourth quarter for severance.
The company attributed the job cuts to "economic pressures, a changing business mix and a more streamlined organizational structure."
The carrier also plans to cut its 2009 capital spending from this year's levels, though actual spending plans have not yet been finalized. AT&T said it would provide details on its capital spending in late January.
The cuts come as the company struggles with declining landline sales, as many consumers switch to wireless or alternative, cheaper services offered by cable and Internet companies.
Shares of AT&T were up 1.4 percent to $29.53 in early trading on the New York Stock Exchange.
"While the weak macro environment is taking its toll on the business, we believe the cuts show the large telcos... have levers they can pull to partially offset the effects of the slowdown," said UBS analyst John Hodulik.