If that does not sound too alarming, considering all of the other bad news that has been shaping the economy, many of AT&T’s competitors are facing cutbacks as well. Just as with every other industry across the globe, these cuts stand to affect suppliers and subcontractors as well. AT&T is conservative in its predictions of a 20 percent drop in capital spending on the equipment necessary to sustain its landline division; however, some analysts say AT&T is being unrealistically conservative. Further, before it begins to see financial advantages courtesy of layoffs, AT&T must first pay out approximately $600 million in severance pay to those employees who are now facing unemployment. Despite union contracts, there stands to be a substantial number of non-represented positions that will cease at some point in the new year as AT&T struggles to place those protected under the current union contracts.
The reduction in landlines is not surprising considering more Americans are relying on their wireless service as their primary phone line. After all, you cannot check email from a traditional phone line. We demand our constant in-the-loop status. We have become a society that thrives on less sleep and more electronic friends who demand we jump each time a breaking-news email hits our wireless devices. Even more interesting is the fact more Americans who earn less than $50,000 per year are the fastest-growing segment buying iPhones and BlackBerries. Clearly, even regular phones are taking their places on the shelf right next to the rotary phones from the ’60s and ’70s.
Still, what about all of those who are facing layoffs, compliments of wireless technology? It is fair to say the walls are closing in, and many employees are beginning to rethink their options. Those who have remained loyal through the years, even as the company underwent growing pains, are now facing the possibility their sure positions are now in jeopardy.
There is, however, a potential light at the end of the tunnel, at least for some employees who hold technical jobs and even quality assurance jobs. A senior spokesman has said that, with a little planning, AT&T might be able to retain more than it had earlier anticipated simply by moving those who have the most to offer to different areas within the company. There has also been talk of relocating some to other regions of the country. Considering this information, the company appears to be making headway as it redefines its parameters in what it offers consumers. Many companies are finding themselves with no way to reshuffle its employees to avoid some of the massive layoffs they now face, so any news of a company that attempts to retain at least some of its employees as a way to keep layoffs to a minimum is welcomed news.
In fact, AT&T has, in times past, simultaneously announced layoffs in one area of the company structure while hiring in other areas, including openings for auditor jobs and media jobs. Ideally, it is those positions that are considered indirectly; the ones that are not designed specifically for the landline divisions. Still, the telecom industry is seeing customers drop Internet service, satellite television, and many of the bells and whistles many wireless phones are designed for. The one-trillion dollar industry has never faced the volatile economic times this country is now seeing.
Based in Dallas, AT&T provides home service to twenty states including California and Texas. With an 11 percent decline in 2008 in not only new landline customers, but those too who have chosen to drop their current home landlines in lieu of their wireless phones, the company has reported a 14 percent increase in their wireless divisions.
Clearly, all of the information coming out of AT&T headquarters appears to be contradictory at times, but BusinessWeek insists this is only the tip of the iceberg of what is yet to come as landline needs continue to decrease. The only steady area is in the business sector, as companies will continue to rely on traditional phone lines to run their companies. Facsimiles and eight-hundred numbers will continue to provide some revenue not only for AT&T, but for other telecommunication companies, even as these same companies are providing employees with cell phones. In fact, consumers agree they are leery of companies who conduct business on cell phones, and feel safer doing business with those that have landlines and physical locations. But will it be enough? Most analysts agree that it will have to be, but the telecommunication companies will need to redesign their packages that include landline services to keep them viable in this area of their offerings.
