AT&T sheds 12,000 jobs

US carrier AT&T announced a headcount reduction of around 12,000 jobs, or about 4 per cent of the company’s total workforce, on Thursday.

The planned reduction is part of the company’s streamlining process, brought about as a result of the economic turbulence and a business mix shifting more to wireless.

The operator said the moves will allow it to reduce its 2009 capital expenditure from 2008 levels and will be discussed in more detail in fourth quarter results.

AT&T will take a charge of approximately $600m in the fourth quarter of 2008 to pay severance to affected employees.

Last month we reported on how the North American wireless industry is standing firm against the downturn and is set to grow in 2009. This latest news from AT&T reinforces these predictions but does not bode well for the fixed line market.

Although North America was the first region to be affected by the economic crisis and has been the hardest hit, wireless operators’ results in the third quarter show how mobile services have become indispensable and two year contracts are protecting the sector in the region.