Struggling AT&T plans “tens of billions” in cost cuts, more layoffs

Struggling AT&T plans “tens of billions” in cost cuts, more layoffs
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AT&T also de-emphasizing DirecTV except in areas without fast broadband.

AT&T is planning tens of billions of dollars worth of cost cuts, AT&T President and COO John Stankey told investors yesterday. Stankey also discussed the future of DirecTV satellite service, saying it won’t be the primary TV option AT&T pitches to most customers going forward.

For the company-wide cuts, AT&T management “has looked at effectively 10 broad initiatives that we believe can generate double digits of billions over a 3-year planning cycle,” Stankey said at a Morgan Stanley conference, according to a transcript posted by AT&T.

One of the first of those 10 initiatives will include job cuts, which Stankey called “headcount rationalization.” Stankey noted that AT&T has already been cutting jobs but said the company plans “additional work” in that area:

In the near term, things that fall in that short-term bucket, I already talked to you about some of them, some of the headcount-rationalization work we’re doing on overhead, some of the benefit restructuring that we’ve done that we’ve already communicated out that get us a good way to some of our objectives this year. We have some additional work we can do in that area. We have some short-term opportunities on how we deal with third-party costs, supplier costs that we’ll be pushing on. We have some near-term opportunities in our call-center structure that we’re working on.

Longer-term cost cutting would start paying off after about two years, Stankey said. That will include “IT rationalization and architecture rationalization, turning down applications, movement to the cloud, getting cost efficiencies in our very, very broad infrastructure, some of that facilitated by portfolio rationalization.” AT&T is also looking at ways to reduce electricity costs and a “billing and credit collections rationalization,” Stankey said.

Source: ArsTechnica

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