It’s been a bad week to work for a phone company, with
BellSouth announcing Friday staff cuts of nearly 5,000 in the coming months.
Executives don’t expect to surprise employees with a pink slips, instead opting for a voluntary separation plan to both managers
and non-managers. The Communications Workers of America union will oversee
the non-management reductions.
BellSouth expects to take a $250 to $300 million charge to pay
for the employee reductions.
The reduction is necessary because of a slow economy, increased competition
and regulatory pricing pressures, according to Duane Ackerman, BellSouth’s
chairman and chief executive officer.
“We face a fiercely competitive marketplace, and we must continue to reduce
our cost structure in order to compete,” he said. “We also must continue
to deliver our products and services at competitive prices to meet the
increasing demands of our customers.”
Most local exchange carriers have blamed their woes on The Telecom
Act of 1996, which opened up the industry to competitors, and has been fought
tooth-and-nail by the Bells since its adoption.
On Tuesday, SBC Communications announced its own
round of layoffs, totaling 5,000, and also attributed it to a slow
economy and government regulations.
In its release, SBC President William Daley also pointed the finger at the
Federal Communications Commission (FCC), the agency responsible for telecom
enforcement.
“As the rules stand now, SBC is discouraged from investing in new
infrastructure or new jobs,” he said. “These rules are not economically
rational and they are uncertain at best.”
Ackerman’s statement Friday comes as no surprise to many industry
analysts, who quickly point to BellSouth’s stellar success deploying
digital subscriber line (DSL) service to its customers.
His statements
belie the fact the company has experienced a 188 percent growth rate (or
625,000 lines) in broadband deploymentt over the last quarter, which Ackerman touted as tops in the country.
Two weeks after making the statement in January, Ackerman went on
to say that despite the success last quarter, the government still
needs to change its telecom policies because it “was not designed for
today’s competitive marketplace nor is it designed for the emerging world
of digital communications.”