NEW YORK — American Telephone & Telegraph Co., still struggling to adapt to the rigors of a deregulated world, said Thursday that it will cut up to 27,400 jobs over the next year and write off $3.2 billion in the fourth quarter.
The cutbacks mean that AT&T--for decades a haven of job security for American workers--will have eliminated 80,000 jobs, or a fifth or its work force, since it was severed from the 22 Bell System telephone operating companies in January, 1984. Most of the jobs being lost in the latest round will be eliminated by layoffs, AT&T said.
AT&T officers could not estimate how many jobs will be lost in Southern California, but they said the 8.5% work force reduction will be imposed proportionally across the country. That suggests a loss of more than 600 of the 7,400 AT&T jobs in Southern California and of more than 1,600 of the 19,600-position statewide payroll.
The charge against AT&T's fourth-quarter profit is expected to leave the company with a quarterly loss of about $1.2 billion and a yearly profit of less than $100 million on $34 billion in revenues, analysts estimated. The $3.2-billion pretax charge is among the largest in corporate history, analysts said, although smaller than the $5-billion charge taken by AT&T in December, 1983, as it prepared for divestiture.
At a press conference here, AT&T Chairman James E. Olson said the layoffs and restructuring would yield a company "in far better financial and operating shape." But he added that the positive effects of the changes will not begin improving the company's profit columns until 1988.
Disappoints Wall Street
The news disappointed many on Wall Street, who for three years have waited for an earnings turnaround that now has receded ever further into the future. AT&T's stock fell $1.125 a share to $26.25 and was the most heavily traded issue on the New York Stock Exchange, with more than 4 million shares sold.
The announcement illustrated again that life after divestiture has proved far more difficult than AT&T executives had expected. AT&T has tried to maintain dominance in long-distance telephone service, while developing a stream of products in data and voice communications and in computer equipment and software that would put the company at the center of a vast worldwide information network.
