AT&T to sack 15,000 as long-distance war heats up

NEW YORK - AT&T, the US telecommunications giant, became the latest big multinational to announce swingeing job cuts, giving notice yesterday to 15,000 employees in its communications-services group that they will be made redundant over the next two years, writes Larry Black.

The redundancies would reduce the workforce of its core long- distance phone services by some 15 per cent, replacing them with new technology. More than half the cuts will come from the ranks of the group management, the company said. The move is expected to save AT&T dollars 900m ( pounds 616m) a year.

The long-distance group - which serves both business and residential customers - accounts for almost 60 per cent of AT&T's annual dollars 65bn turnover, but has seen profits stagnate in recent years. AT&T chief executive Robert Allen, who has added new businesses such as computers and cellular communications, has promised to expand the company by 10 per cent a year through the end of the century.

With communications deregulation in the air and new competition likely from both cable companies and the regional 'Baby Bell' utilities, AT&T's dominance of the long-distance market has never been more threatened. Its existing rivals are growing at more than 10 per cent a year - notably MCI, which is 20 per cent-owned by BT.