AT&T Sees 10,000 Job Cuts After BellSouth Deal
AT&T Inc. estimates there will be about 10,000 job cuts in the next three years (between 2007 and 2009) because of it's acquisition of BellSouth. The acquisition cost AT&T almost $70 billion dollars, and the company is looking to save money in any way possible. The job cuts would be part of a plan save AT&T nearly $20 billion dollars, and would only represent about three percent of the combined work force. The company also looks to save money by cutting down on advertising.
As you can see, AT&T realized that the acquistion of BellSouth would allow one company to enjoy the maximum benefits, and increases AT&T's growth profile. The merger brings to AT&T both BellSouth and Cingular Wireless.
The merger also begs the question, "who will be next?" Verizon stands firm on its position to simply buy the rest of Verizon Wireless.
AT&T's acquisition will put the company in debt, which is why the need to save money is so large. It also puts a lot of pressure on the competition to make their companies larger as well. As a result of acquistions like AT&T's, consumers should benefit greatly as well.
1 comment:
I have to agree with Tiffany's comment because it makes one wonder how could $20 billion in profit help balance $70 billion in costs. In what possible ways could AT&T balance out those two prices and still continue to grow with more benefits?
This article is somewhat personal to me because my mother used to work for AT&T a few years ago. The company was laready beginning to downsize and she unfortunately got laid off. It was fortunate that the family was in a secure place at the time. Otherwise, things would have started to have gotten ugly fast.
It would appear that AT&T cares more about getting larger and saving money than its employees. The article states that they are willing to pay off the costs any way necessary, which made losing 10,000 jobs not a difficult decision. Also, if AT&T already is joined with Cingular Wireless adn IBM, then why continue with BELL South? It almost appears to me that AT&T is trying to become a monopoly in telecommunications, doesn't it?
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