November 29, 2004
Cingular to Cut 10% of Jobs in Merger With AT&T Wireless
ATLANTA - Cingular Wireless LLC, the nation's largest cell phone company, will cut about 10 percent of its 68,000 jobs over the next 12 to 18 months as it combines operations with the recently acquired AT&T Wireless, Cingular's chief executive said Tuesday.
Many of the 7,000 or so job cuts will come from administrative ranks, while relatively few if any would come from customer service, CEO Stan Sigman told The Associated Press.
No cuts are expected until January to prevent disruptions during the key holiday-selling season. Company officials are still working on the exact numbers, and the cuts will be spread out over more than a year, he said.
"It's not going to be in the big groups of people. The big groups of people are in customer care," Sigman said. "This isn't about closing stores or distribution channels, nothing like that."
Sigman stressed that Cingular's goal would be to hire those employees back over time as the company expands its current subscriber base of 47.25 million.
"There will be people that will be affected by this, absolutely," Sigman said. "If you go to Redmond, Wash., where AT&T Wireless Services Inc. is based, there's anxiety there about how this is going to affect them and what is the impact on them. I've made a commitment that there will not be any forced layoffs until the first of the year."
Cingular, a joint venture of Atlanta-based BellSouth Corp. and San Antonio-based SBC Communications Inc., hopes to achieve billions of dollars in cost savings through the merger. The acquisition of AT&T Wireless gave the company about 5 million more subscribers than former market leader Verizon Wireless, a joint venture owned by Verizon Communications Inc. and Vodafone Group PLC.
After completing the $41 billion purchase of AT&T Wireless last month, Cingular asserted that no decisions about jobs cuts would be announced until the start of 2005.
But on Tuesday, asked if Cingular planned to cut more than 10 percent of its workforce, Sigman said, "That's probably close."
The expected cuts are not related to the 10,000 or more positions which SBC recently disclosed plans to eliminate. Those cuts, about 6 percent of SBC's workforce, are to be made by the end of 2005 through a combination of layoffs and attrition.
Some analysts have suggested that Verizon Wireless, which has 42.1 million customers, could eventually retake the No. 1 spot because it has been adding customers at a much faster rate than Cingular.
Also, since both Cingular Wireless and AT&T Wireless are already losing customers to rivals at a faster rate than Verizon, any service glitches during the integration of the two businesses could prove costly.
But Sigman, who at times pounded his fists on his chair to emphasize a point, asserted that the merger is running smoothly so far and that he is committed to holding the No. 1 spot.
"There are little minimal problems, a little system problem, a system in any market being down for a period of an hour or two, some training problems," he said. Being No. 1 is "a passion that I have. It's also a hatred that I have that we're not already there. Every day that we're not there, I hate it."
While the company is No. 1 in customers, Sigman said the company is still middle of the pack on other important measures like reputation.