BellSouth Cutting Up To 5,000 Jobs

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Regional phone company BellSouth Corp. plans to cut 4,000 to 5,000 jobs — or as much as 6 percent of its work force as it struggles with a weak economy, tougher competition and regulatory pressures.

The company said it would eliminate both management and non-management jobs.

"We face a fiercely competitive marketplace, and we must continue to reduce our cost structure in order to compete," chief executive Duane Ackerman said. "We also must continue to deliver our products and services at competitive prices to meet the increasing demands of our customers."

The cuts are the largest yet as BellSouth, which serves nine Southeastern states, struggles with a still-soft economy.

In October, BellSouth slashed 3,000 white-collar jobs. And in December, it eliminated 1,200 technical and clerical jobs throughout the service area. Most of those 4,200 workers were based in Georgia.

The latest round of cuts were announced to BellSouth's nearly 86,000 employees in a companywide e-mail Friday afternoon, spokesman Jeff Battcher said. Ackerman also announced them in a video conference call with company executives.

Management employees will be offered incentives to leave. If enough people don't accept the severance package by a June 14 deadline, layoffs will begin in July, Battcher said. Non-management job cuts will be worked out through the workers' union.

"We fully expect most of these reductions to come from the voluntary offer that we have on the table now with these employees," he said.

The announcement came four days after a divided Supreme Court cleared the way for competitors to fight the baby Bells for the $110 billion local telephone business. Monday's high court ruling would keep costs low for companies such as WorldCom and AT&T Corp., which pay fees to piggyback on a local telephone companies' calling networks.

BellSouth was part of a conglomeration of former Bells that wanted the ability to charge other telephone companies higher fees for using their lines.

Two days later, BellSouth got some good news when government regulators gave it the go-ahead to offer long-distance service in Georgia and Louisiana. Federal approval came only after the telecommunications company resolved regulators' worries that it had done too little to stoke competition in the local phone game.

The company said it would take an after-tax charge of $250 million to $300 million as a result of the reduction.

BellSouth fell short of Wall Street expectations in its first-quarter earnings report and said it expected weak sales for the rest of the year.

Atlanta-based BellSouth serves nearly 45 million customers in the United States and 14 other countries.

It is the regional phone provider for nine Southeastern states: Louisiana, Mississippi, Georgia, Alabama, Tennessee, Kentucky, Florida, North Carolina and South Carolina.

BellSouth shares slid 26 cents to $33.24 Friday in afternoon trading on the New York Stock Exchange.
  • Jaime Holguin

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