NEW YORK — AT&T Corp. intends to cut jobs at its money-losing computer unit in a restructuring that may eliminate as many as 10,000 positions, leading to a $1.2-billion charge in the third quarter, analysts and a published report said.
The job cuts would amount to more than 20% of the work force at Global Information Solutions Inc., the unit based in Dayton, Ohio.
The ailing computer unit, formerly NCR Corp., has been bleeding money since AT&T bought it for $7.4 billion in 1990. The unit lost $332 million in the first half of the year as the company faced stiff competition in the computer industry.
AT&T, which started the restructuring in July, is expected to announce definitive plans on the staffing cuts for the unit next week. Analysts said the restructuring could lead to the sale or spinoff of all or parts of the unit. Global Information Solutions makes large computers, laptops, automated teller machines and grocery store bar-code scanners.
Company officials Friday refused to confirm or deny the report, published in the Wall Street Journal.
"We said on July 28 that we would provide details of the restructuring of GIS by the end of September, and we are still on track to do that," said Mark Siegel, an AT&T spokesman.
AT&T shares closed up 87.5 cents at $58.25 on Friday in New York Stock Exchange trading.
In July, AT&T said it would restructure GIS into six businesses in an effort to make the unit profitable amid the mounting losses. The unit's new head, Lars Nyberg, is the fourth executive to run GIS since 1990.
The unit has 42,800 employees in 120 countries. The Wall Street Journal said GIS will take the $1.2-billion charge in the third quarter.
Analysts said NCR's strength was in making big computers, a market that is not growing as fast as the one for personal computers. The company has yet to adjust to the industry shift, they said.
"AT&T was ambushed by unexpected trends in the computer business," said William Deatherage, analyst at Bear Stearns & Co.
Analysts reiterated their opinions that AT&T will probably try to spin off or sell certain parts of GIS.
"Someone could buy the automatic teller side of the business, or the cash register side, or even the computer maintenance side, but not the personal computer business," Deatherage said.