Bell Atlantic memo foretells 'aggressive cost reductions'

August 12, 1994|By Michael Dresser | Michael Dresser,Bloomberg Business NewsSun Staff Writer

Bell Atlantic Corp., the regional phone company that serves Maryland, is scheduled to announce next week that it will carry out "aggressive cost reductions" including job cuts and the consolidation of existing facilities, according to an internal company memo.

The Aug. 3 memo, which was not signed in the version obtained by The Sun, is addressed to four Bell Atlantic executives who apparently are responsible for helping to spread the news. After warning the recipients that the memo should be considered "insider information" until Aug. 16, the writer outlines the company's plans for handling the announcement of the cutbacks.

According to the memo, at 7 a.m. that day the company will hold a news conference announcing "a sweeping accounting change and Bell Atlantic's plans to achieve continued, aggressive cost reductions through center consolidations, elimination of jobs, increased spans of control and other measures."

In business jargon, the reference to "spans of control" indicates that middle managers could be hard hit by the cutbacks as the company increases the number of employees reporting to each executive.

The memo, which apparently originated in the Employee Communications department, did not specify how many jobs or which Bell Atlantic facilities might be eliminated in the cost reduction. But the degree of planning and high-level involvement in the announcement indicates that the numbers could be significant.

According to the memo, the Philadelphia-based phone company will hold a news conference and circulate an electronic mail message from Bell Atlantic chief operating officer Lawrence T. Babbio Jr. next Tuesday to announce the changes. That will be followed by a faxed special report with questions and answers for all employees and a faxed discussion guide for supervisors.

"Bell Atlantic will continue to aggressively manage force reductions through attrition/redeployment where possible . . . our record of fairness in this area is excellent," the memo reads.

There is no indication from recent stock price or earnings trends that Bell Atlantic is in any financial distress. The planned cutbacks are part of a long standing trend of work force cutbacks among the regional Bell companies, which have increasingly turned to sophisticated telecommunications technology to replace employees.

Since 1984, Bell Atlantic has cut more than 12,000 jobs, primarily relying on buyouts, early-retirement packages and other voluntary incentives. The last wave of cuts came in 1992, when about 3,450 jobs were eliminated.

Dave Pacholczyk, a spokesman for Bell Atlantic in Baltimore, said he could neither confirm nor deny the memo's authenticity. He said the four executives to whom the memo was addressed are Bell Atlantic employees.

The memo appears to outline an internal game plan for communicating the news to Bell Atlantic's employees, roughly 73,600 strong as of the end of 1993.

According to the memo, the "key corporate messages" to be delivered that day are that:

* "Bell Atlantic must adopt accounting methods appropriate for the competitive environment."

* "Bell Atlantic must aggressively deploy new technology . . . and depreciate existing equipment over a more realistic time frame."

* "Bell Atlantic must reduce costs to meet customer requirements."

The four Bell Atlantic employees to whom the memo was addressed are Ritchie Ireland, Larry Plumb, Robert Holtz and Susan Younkins.

Mr. Pacholczyk said Mr. Plumb is the media relations director for Bell Atlantic Video Services; Mr. Ireland is vice president for external affairs in West Virginia; and Susan Younkins works in Bell Atlantic's Federal Systems Group. Mr. Holtz's title was not immediately available.


Bell Atlantic Corp.

Headquarters: Philadelphia

Employees: 73,600

Chairman/CEO: Raymond W. Smith

Businesses: Local telephone service in the mid-Atlantic, including Maryland and Washington. Also operates cellular phone services, maintains computer equipment and sells and repairs computer parts.

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