February 1, 2004
By TERRY MAXON
The Dallas Morning News
The merger of AT&T Corp. and SBC Communications Inc. would probably bring about 13,000 job cuts as the merged company targets duplicated positions, officials said Tuesday.
Speaking to analysts and investors, company executives said they expect to chop about $2 billion in expenses by eliminating jobs and facilities that overlap.
About 60 percent of the savings each year would come from cuts in headcount, but officials said they hope they could achieve most of the reductions through attrition as people quit or retire.
"We think if we're very aggressive and manage our force, we can do this without dramatic layoffs," said Randall Stephenson, SBC's chief operating officer.
Those job cuts in 2006 and beyond are in addition to reductions previously announced for 2005 by the two companies – 7,000 jobs at SBC and 5,100 at AT&T.
On Monday, SBC and AT&T executives said they wanted to complete the deal in the first half of 2006. On Tuesday, SBC chairman and chief executive Edward Whitacre Jr. revised the schedule to "early next year," and added: "I expect us to beat that."
Tuesday's meeting in New York brought complaints from several investors that the $16 billion sale price – $1 billion in cash and $15 billion in SBC stock – valued the company too cheaply, considering AT&T's assets and strong cash flow.
AT&T chairman and chief executive David Dorman defended SBC's offer, saying the price offered a premium over AT&T's recent trading price.
In addition, he said, there were only three potential buyers for a company like AT&T.
Auctioning the company "would be incredibility risky for shareholders," he said. "I believe we got a very fair deal from SBC."
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