AT&T Announces Cuts of Over 12,000 Jobs

News of job cuts and corporate failures are still dominating economic news and this announcement from AT&T is just the latest indicator that the global economy is going to get worse before it can get better. AT&T is the largest U.S.-based telecommunications company and is based in Dallas, Texas. And although 12,000 jobs is a huge number by any estimation, it "only" represents about 4% of AT&T's global workforce of roughly 300,000 employees.

Also on the positive side for AT&T, this announcement represents a growing trend in telecom, which has been fueled by the housing crisis and the general economic downturn facing the U.S. Many of AT&T's land line voice customers are switching exclusively to their mobile phones in an effort to cut personal spending. While this pulls business away from AT&T's traditional revenue base, it also boosts their online services to a degree. Business was down 11% on the land line side of AT&T, while their wireless services division saw an increase of 14% over the same period.

This trend toward mobile-only lifestyles was happening prior to the current financial crisis, so this announcement may not be as grim of an indicator as some of the others. And while AT&T seems to be fairly stable throughout this period of crisis, some of its competitors, like Sprint, have fallen on desperate times. Sprint has seen its stock price plummet nearly 80% and is in the process of cutting nearly 60,000 jobs.

Verizon, on the other hand, is out-performing even AT&T. Verizon's land line customers are based largely in the northeast, one of the more stable regions from an economic standpoint. Analysts are predicting, however, that Verizon will start to see significant revenue fall-offs as corporations continue to down-size and consolidate.