AT&T Corp.’s new chief executive is expected to unveil thousands of job cuts and other measures at a strategy session Monday that could result in billions of dollars in charges, several analysts said.
C. Michael Armstrong may slash 10,000 to 20,000 jobs, or as much as 15 percent of AT&T’s 130,000 work force, analysts said. He is also expected to write down outmoded assets, such as old billing and software systems.
Armstrong’s remarks in New York are scheduled for the same day that AT&T reports its fourth-quarter earnings.
Armstrong’s first big meeting with analysts, major shareholders and money managers will reveal how deeply he’s willing to cut to get AT&T back on track.
The company has turned in three straight quarters of lower profits as it stumbled in the local phone market and saw long-distance customers defect to rivals.
“He intends to streamline the organization,” said Blake Bath, an analyst with Lehman Brothers, who has a “buy” recommendation on AT&T. “There will be charges both for (outdated) systems as well as for a reduction in the work force.”
AT&T declined to comment. Armstrong is scheduled to address employees before he meets with analysts.
