BellSouth plans to cut between 4,000 and 5,000 jobs, the dominant local telephone company for the southeast U.S. announced Friday. The cost-cutting move by the Atlanta carrier is a response to a slow economy and increased competition, the company said. BellSouth will record an after-tax charge of US$250 million to $300 million in restructuring costs. The cuts will be made under a voluntary separation plan for management and in accordance with the company's agreement with the Communications Workers of America union for union workers.
"We see virtually all of them taking the voluntary package," said Jeff Battcher, a BellSouth spokesman. Managers will receive the offer in the mail by May 27 and must accept or decline by June 14, while union job cuts will be completed by September, Battcher said.
BellSouth's layoffs are just one more sign that things aren't getting better in the telecommunications market as fast as observers had once hoped. At the end of 2001, analysts predicted that the telecommunications sector's recovery would be under way by now, but there has been no sign from the companies that it is happening. Over 60,000 job cuts in telecommunications had been announced by March since the beginning of 2002, according to research from Challenger, Gray & Christmas Inc. Another 38,176 layoffs were announced in April alone, 75 percent more than April of 2001, according to the firm.
Verizon Communications Inc. cut 10,000 jobs in March. WorldCom Inc. cut 3,700 in April. And earlier this week, SBC Communications Inc. announced it would cut 5,000 jobs for similar reasons to the ones given by BellSouth.
"We have continued to see our services drop off," Battcher said.
Customers are increasingly turning to cell phone use and the Web for their communications needs, leaving plain old telephone service to wither, he added. Battcher also cited the regulatory environment, which he said forces incumbent carriers to bear a heavier burden for legal compliance than BellSouth's competitors.