RealTime IT News

SBC To Cut 11,000 More Jobs

SBC officials announced Thursday the reduction of 11,000 of its workers by early 2003 and a cut in capital spending to $5 or $6 billion.

Adding in today's numbers, the Bell giant has cut 26,000 positions from its roster since last year. The last round of job cuts was announced in May, with 5,000 positions eliminated and finalized three months ago.

According to a statement released today, the bulk of the reductions will happen in the fourth quarter and finish up in the first quarter of 2003. Officials expect to add the charge for severance packages and such to its third and fourth quarter financial numbers.

Of the 11,000 jobs affected, roughly 3,500 management jobs will be affected. Officials were unavailable for comment on the non-management positions affected by the cuts, and whether they would include customer support personnel. In the past, executives assured its customers no major support purges would occur to affect service.

Edward Whitacre, SBC chairman and chief executive officer, blamed out-dated regulations as the cause for the job losses, saying they treated incumbent local exchange carriers (ILECs) unfairly.

It's a position he's taken when announcing job cuts in the past; in May, regulations were "creating an uneven playing field," while in March, the announcement of job cuts was followed by a call for all regulatory requirements and costs becoming more certain for all providers.

In a statement Thursday, Whitacre again took the Telecom Act of 1996 (which spells out the terms of competitive access on Bell networks) to task, saying the legislation gives huge discounts to its competitors.

"Under this pricing scheme, a century of regulatory policy has been turned on its head," he said. "Instead of subsidizing prices for average consumers, we now subsidize competitors who in turn siphon revenues out of the market."

SBC officials maintain they have lost three million retail access lines over the past year to the competition, and have lost $1 billion in revenues in the first half of 2002. At that rate, they predict to lose another $2.5 billion in the next four quarters. At the same time, regulators are moving too slow to approve the Bell's application for long-distance telephone service in its 13-state footprint.