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AT&T layoffs, Step 1: Reorganization

AT&T’s move to reorganize itself into four business units is likely a precursor to layoffs, according to sources of GigaOM's Stacey Higginbotham.AT&T's reorganization comes as the company tries to adjust to our current credit-crunching economic situation, diminishing access line and DSL business and an increased amount of employees, the result of two large mergers in the last three years.
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Written by Andrew Nusca, Former editor on

AT&TAT&T’s move to reorganize itself into four business units is likely a precursor to layoffs, according to sources of GigaOM's Stacey Higginbotham.

AT&T's reorganization comes as the company tries to adjust to our current credit-crunching economic situation, diminishing access line and DSL business and an increased amount of employees, the result of two large mergers in the last three years.

AT&T will rearrange into consumer, business, infrastructure and diversified products units, with the intention of making consumer products work better across its portfolio of devices, as well as better aligning the company to compete against cable carriers. News of the company's moves first appeared yesterday.

Higginbotham reports:

Managers inside AT&T expect that they’ll soon get targets for headcount reductions ranging anywhere from 5 percent all the way to 20 percent in some areas of the company (I bet DSL and wireline will be hardest hit). When asked about layoffs via email, AT&T spokesman Marc Bien said, “Regarding headcount, at this time, we have no specific plans for workforce changes related to this new organizational structure.”

Of course, it's only a matter of time: Earlier this year the carrier announced a workforce reduction of 1.5 percent (about 4,650 workers) in its local phone business, but it still employed 307,550 people as of June 30. "I expect that number will drop again soon," Higginbotham writes.

Any AT&T employees out there? What's the word? (Tell us in TalkBack.)

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