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AT&T job cuts expected
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January 24, 2000: 2:34 p.m. ET
Telecom firm may trim up to 150 executives in broad cost-cutting plan
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NEW YORK (CNNfn) - AT&T Corp. is expected to provide details Tuesday of a work force reduction that could trim as much as 25 percent of the company's 600 person senior executive staff.
The job cuts, part of a broader $2 billion cost-cutting initiative the company disclosed in September, already have begun and could affect as many as 150 senior executives, according to a company spokesman.
"I've seen executives at that level leave already, and I would expect that to continue throughout this winter," Burke Stinson, an AT&T (T) spokesman told CNNfn.com Monday.
Although he would not confirm the expected number of executives to be let go under the plan, first reported by the Wall Street Journal Monday, Stinson did say he "would not be surprised" if the company were to eliminate that many executive positions.
Further details about the reported job cuts as well as the progress of the company's cost-cutting efforts will be available Tuesday, when AT&T releases its fourth-quarter financial results, Stinson said.
Analysts polled by earnings tracker First Call expect AT&T to post a profit of 55 cents per share for the quarter, down from 67 cents a year earlier.
The expected year-to-year profit decline is the result of extensive spending to build up the company's high-growth business lines, including wireless and cable, according to Drake Johnstone, an analyst at Davenport & Co. in Richmond, Va.
But the job cuts, many of which are expected to come from the company's consumer long-distance division, likely are being made as a pre-emptive move in order to offset potential declines in long-distance revenue, Johnstone said.
Bell Atlantic (BEL), a leading local phone service provider in the Northeast, recently won FCC approval to offer long-distance services in New York and has launched an aggressive marketing plan aimed at garnering 1 million customers in 2000 and a 25-percent market share at the end of five years.
By trimming the workforce in its slower-growing long-distance division, AT&T will be better able to fuel the growth of its other business, such as cable and wireless, according to Johnstone.
"It will position them to continue to grow their cash flow strongly from long-distance in an environment that could become more competitive," he said.
AT&T shares slipped 9/16, or 1.08 percent, to 51-1/2 in New York Stock Exchange trade Monday. 
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AT&T
Bell Atlantic
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