Ameritech phone firm to cut 6,000 jobs by end of '95

March 26, 1994|By Bloomberg Business News

CHICAGO -- Ameritech Corp. said yesterday that it will eliminate 6,000 jobs -- one-eighth of its nonmanagement work force -- by the end of next year through a plan that will force the company to take a $335 million first-quarter charge.

The job cuts at the regional telephone company, part of an efficiency trend sweeping the telecommunications industry, will be accomplished by offering enhanced pension benefits and other incentives to workers who quit, the company said.

Analysts said that even with the wave of cost-cutting that's hit the industry, all the regional Bell operating companies face additional pruning.

"The truth of the matter is none of them is satisfactorily competitive in terms of where they need to go," said Michael Balhoff, a telecommunications analyst with Legg Mason Wood Walker. "They really need to strip out huge layers of costs in their operations."

To pay for yesterday's actions, Ameritech will take a charge of 60 cents a share for the quarter.

The company had been expected to earn about 66 cents a share, according to a survey of 15 analysts conducted before the announcement by the Institutional Brokers Estimate System.

Ameritech plans to report its first-quarter results April 20.

Shares of Ameritech closed down 87.5 cents, at $39.625, on New York Stock Exchange composite volume of 535,300, compared with an average daily volume of 857,000 over the past three months.

"These initiatives are part of a continuing effort to make Ameritech more efficient and customer-responsive in an increasingly competitive and rapidly changing communications industry," said Dick Notebaert, the Chicago-based company's president and chief executive officer.

Ameritech cut 1,500 management jobs during the last third of 1993. That followed the elimination of 3,000 management jobs in 1992. About 48,000 of the company's 67,000 employees are nonmanagement.

Ameritech has eliminated 10,000 jobs since the end of 1989 as the company restructured itself into a single operating unit with regional divisions.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.