For AT&T workers, another brutal round of cuts


Published: Tuesday, February 1, 2005 at 6:01 a.m.
Last Modified: Tuesday, February 1, 2005 at 12:11 a.m.
NEW YORK - A job with AT&T Corp. used to be a job for life; as steady as the company's dependable stock.
That held true until the Bell System broke up in 1984. Now, ''Bellheads,'' as AT&T's longtime employees are nicknamed, face another in the relentless round of job cuts that have reduced the company from 1 million employees in 1984 to 47,000 today.
If SBC Communications Inc., based in San Antonio, completes its $16 billion purchase of Ma Bell, the combined companies can cut more than $500 million in corporate overhead by 2011. That can only mean one thing for AT&T employees: time to start reading the ''help wanted'' ads.
The company's days as a paragon of stability are long gone; its stock changed from a rock-steady investment to Internet high-flyer, to a post-bubble loser.
As a lifetime employer, the company fared even worse, cutting so many jobs so often, it has become synonymous with corporate downsizing.
It's a mark of how bad things are at AT&T that the merger - complete with its certainty of more job losses - was greeted as good news by the company's main union, the Communications Workers of America.
''In recent years, AT&T has been contracting its business and shedding jobs,'' union president Morton Bahr said in a statement. ''With the integration of its operations into SBC, there is now the opportunity for a new strategy that instead focuses on dynamic growth and creation of new services and technologies.''
The job cuts have been driven by fundamental changes in the business.
Before its break up, AT&T was a highly structured, topdown nationwide behemoth and the world's largest company.
''It was more like the Army than the Army was,'' said Joe Porus, who worked at AT&T and its spin-off company, Lucent Technologies Inc. from 1978 until 2001, when he retired as a senior manager for market research and strategy.
Jobs ranged from delivering floor plans of the complicated equipment in the central offices that routed phone calls to typing up the day's cafeteria lunch menu.
As a government sanctioned monopoly, the profit motive didn't come into play. If its expenses rose, the company would simply increase prices. Jobs for life? No problem. A plush 2.6 million-square-foot corporate headquarters nicknamed ''The Pagoda?'' Of course. Chauffeured cars for top executives? They deserved nothing less.
In exchange, the government demanded reliability, and AT&T delivered.
The first crack in the system came under in 1968 when competitors were allowed to sell phones to encourage the development of new technologies.
Until then, AT&T had manufactured every phone on every desk and night stand in the nation.
Then, AT&T ceased to be a monopoly when the government ordered the break up of the Bell System in 1984.
Competitors such as Sprint Corp. fought for a share of the lucrative long-distance business, cutting into AT&T's rich profit margins.
The regional bell companies picked up the rich market for local calling. During the tech boom, small companies burned dollars on their way to bankruptcy by offering business customers deeply discounted rates, depressing prices.
As the competition intensified, job cuts assuaged investors' fears.
When cuts were announced, the stock got a temporary bounce.
Some analysts grumbled that AT&T, based in Bedminster, N.J., had plenty of fat to cut.
While analysts could afford to banter about the cuts, workers moved from stability to anxiety.
For some workers, the break up was ''like a sledgehammer,'' said Porus. The ongoing cuts? ''Trauma,'' he said. Longtime workers still with the company today have survived almost a decade of unrelenting job cuts.
The company announced in early 1996 it would cut 48,500 jobs. Then-chief executive Robert Allen made the cover of ''Newsweek'' magazine, with the headline ''Corporate Killers.''
When the next chief executive officer, C. Michael Armstrong, arrived in 1997, he pledged to cut $4 billion in expenses, starting with the chauffeured car service for top executives. Within a year, Armstrong had announced so many waves of job cuts that the satirical newspaper ''The Onion'' ran a fake story in 1998 headlined ''1,500 Dead in AT&T Cost-Cutting Measure.''
The fake story quoted Armstrong, speaking from atop a pile of bodies, saying, ''It's a shame that these people are no longer with us, but the end result should be a leaner, stronger AT&T.''
Those attuned to irony could hear his fake quote echoed in the actual words of AT&T's chief executive officer David Dorman on a conference call Monday.
''Some of the coverage I've seen suggests that the merger is the end of AT&T,'' Dorman said. ''Nothing could be further from the truth.''
''This is the beginning of a new era,'' he said.
In the last six months alone, the company has cut 14,000 jobs.
Retirees like Porus know the days of a job for life are gone forever.
''My kids look at me like a dinosaur when I talk about the old days at AT&T, counting on staying there, counting on a pension,'' he said.

Reader comments posted to this article may be published in our print edition. All rights reserved. This copyrighted material may not be re-published without permission. Links are encouraged.

Comments are currently unavailable on this article

▲ Return to Top