RealTime IT News

SBC Cuts Jobs Blaming Regulators, Economy

Executives at SBC Communications announced Tuesday the elimination of 5,000 employees this quarter, cuts necessary because of too-stringent regulations that apply to the telephone companies and not the competition.

The announcement brings the total number of cuts at 15,000: in the last two quarters, SBC has laid off 10,000 employees and in March the company predicted it would reduce 4,000 positions in the last three quarters of 2002. Officials didn't speculate if today's cuts would be the last for the year.

"Policymakers could provide this industry and the U.S. economy with a boost by creating rules which provide an incentive for companies to invest and create jobs," said William Daley, SBC president. "As the rules stand now, SBC is discouraged from investing in new infrastructure or new jobs. These rules are not economically rational and they are uncertain at best.

"We will continue to provide the best possible service to our customers," he added.

Both management and non-management jobs are at risk, though officials said the cuts wouldn't affect positions "directly involved in serving customers.

SBC, and the other three incumbent local exchange carriers (ILECs), have long warned of the telecom regulation's affects on its business success down the road.

Before Daley took over the day-to-day operations of SBC, former SBC President Ed Whitacre made a lot of noise about the Federal Communications Commission's and Congress' lack of effort in easing regulations to spur growth. What was worse, he said, was the lack of regulation imposed on the telephone company's biggest rival, cable, creating an uneven playing field.

Jobs cuts will be finalized by the end of June, affecting employees throughout SBC's 13-state coverage area.

Officials also blame the stagnant economy of the past year as a contributor in Tuesday's cuts, with Daley saying the cuts are necessary to continue operations.

"Reducing our workforce is something we try to avoid, but until the economy begins to recover, it's something we have to do," he said.