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RealTime IT News

Job Cuts to Provide Bulk of SBC-AT&T Synergies

SBC plans to cut nearly 13,000 positions from its payroll after its $16 billion acquisition of AT&T closes in early 2006, the company told analysts Tuesday.

Around 5,125 jobs will come from network operations departments including engineering, access, management and enterprise customer service, while another 5,100 redundant sales and business operations posts will be eliminated.

Finally, 2,600 jobs will be trimmed from corporate units, including legal, human resources, finance, advertising and public relations.

The company believes most of the reductions can be achieved through attrition, Destiny Belknap, an SBC spokeswoman, told internetnews.com.

No timetable has been given for the actions, but SBC said it expects "synergies [to] start immediately after integration and ramp quickly."

In addition to gaining enterprise customers and Internet Protocol network assets, the ability to cut costs was a major factor behind the San Antonio regional carrier's bid for the Bedminster, N.J., long-distance stalwart.

Nearly 60 percent of synergies are provided by headcount reductions, SBC said yesterday. SBC currently has about 163,000 employees, while AT&T has 47,000. Others savings will come from increased buying power, consolidating data centers as well as other activities such as employee help desk support.

In 2007, the first full year of the combined company, SBC expects $1.1 to 1.6 billion in savings. SBC estimates savings of $ 2.1 billion to $2.6 billion in 2008 and $2.4 billion to $2.9 billion in 2009.