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Biz Week: AT&T layoffs start telecom downturn
As if we didn't have enough bad news to worry about, Business Week asserts that cutbacks in consumer spending means that telecommunications service providers will have to do the same, causing a ripple effect that will impact equipment makers as well. We're not so sure to blame it all on the economy.
AT&T is used as the poster child for this theory, since the company has said it might cut back on the amount of network upgrades next year as it cuts 12,000 jobs - about 4 percent of its current work force. Verizon cut 2,700 people in the third quarter and Sprint has cut 4,000.
Before we ride the doom parade, we'd like to point out two factors: 1) Sprint has been a wounded duck for quite a while. 2) Just how much of these cuts can be attributed to the rapidly declining landline businesses of AT&T and Verizon is not really clear. But poor economic news makes for good cover. (Hard-core economics wonks may remember that the airline industry was bleeding money back around 2000-2001 and 9/11 provided the final straw/trigger).
Analysts are lining up to predict that more staff reductions and capital spending cuts are on the way, so equipment makers may see issues down the road. With people economizing by dumping landlines and even web connections, less seems to be more, but-
At the same time people are trimming, they are buying new wireless services (cheers from our sister pubs in the FierceWireless division). According to ComScore, the fastest growing segment of buyers for the Apple iPhone is people who earn less than $50,000 a year. Biz Week concludes this is because of belt-tightening; we would argue that this is the Millennial just-out-of-college/landlines-are-so-unhip crowd buying iPhones because they're never going to touch a wired phone if they can help it.
Predictions for growth next year are minimal at best, and there's a suggestion that even the cash-cow wireless service providers may need to cut prices in order in order to retain customers. Wireless ARPU has risen for 9 out of 10 years over the past decade.
Needless to say, capital spending on equipment is being predicted to drop anywhere from 10 to 20 percent just at AT&T alone, so suffering is predicted for everyone from Cisco and Juniper, to already-suffering Nortel and Alcatel-Lucent.
For more:
- Business Week speculates on the impact of a slowing economy upon telecom. Article.
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Comments
Posted by Anonymous | March 27, 2010 - 6:18pm
$1.45 million was salary.
$12.1 million was in "performance-based" stock awards.
$864,632 in "other compensation," inlcuding $215,954 for club memberships, $86,045 for personal use of the company aircraft, $76,253 for home security, $27,550 for communications, $26,591 for auto benefits, and $14,000 for financial counseling.
These figures don't include any changes in the value of his pension benefits or "Retention Plan."
Posted by Local 6450 rep | August 3, 2009 - 4:07pm
I am dumbfounded why he is getting the money he is getting. This company made 12.9 BILLON in profit, but wants to rape it employee base by making us take a 3000 dollar pay cut in medical benefits, taking sales bonuses away,and all other perks. It is sad that we have to be raped so that Randall Stevenson can make all of the money he has made. It soulds like Michael Armstrong who destroyed the original AT&T Corp.
Posted by Anonymous | January 9, 2009 - 8:48am
AT&T Chairman and CEO Randall Stephenson earned about $18 million last year-about $1.2 million in salary and the rest in performance-based bonuses and stock awards, according to BusinessWeek, which does not rely on company figures and uses its own methods to calculate such things. The non-salary compensation included more than $89,000 worth of personal use of a company plane, more than $15,000 for a home security system and more than $10,000 for a club membership. No one seems to care so far, but those figures might raise eyebrows if the employer were a company other than AT&T. For example, Qwest Communications CEO Ed Mueller was lambasted by some company watchers for a perk that allowed his family to use the corporate jet.
AT&T had a very good year in 2007, rolling out U-verse rapidly, while posting impressive customer and financial numbers. Of course, Stephenson was only in charge for about seven months of 2007. More recently, AT&T has reported seeing some market softness. Do any of these perks seem out of whack, or do they seem perfectly in line with the stature of the job? Post a comment and let us know what you think.
For more:
- read this story at BusinessWeek
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