AT&T Layoff: The Telecom Sky Is Not Falling

This morning, telecom giant AT&T announced a four percent, or 12,000 employee reduction in its workforce, citing recent changes in business and economic factors.

"In response to these business and economic factors, AT&T plans to reduce its 2009 capital expenditures from 2008 levels. Capital plans for 2009 are being finalized now and specific guidance will be provided when the company releases its fourth quarter results in late January.

"Associated with these job reductions which will occur in December and throughout 2009, AT&T will take a charge of approximately $600 million in the fourth quarter of 2008 to pay severance to affected employees."

(AT&T Press Release)

The listervs are alive this morning on discussion of a potential and pending "telecom collapse" of sorts, looking ahead to the state of the auto industry. In a particular NANOG thread, readers aren't particularly sympathetic with AT&T's current state of affairs. When discussion of a bailout appeared, the consensus seemed to be to let the chips fall where they may.

From my perspective, telecommunications networks are critical infrastructure. From the millions of miles of fiber and copper that cross every town, city, and state, to the extensive investments in switching and transport platforms, this infrastructure is essential to not only every American family, but business as well. Any weakness or rapidly-changing business situation that would negatively affect the US telecommunications infrastructure would be a threat to national security as well.

My bottom line? Don't panic -- before things on the business side get questionable, there will be enough support from the government to keep the large-LEC ship afloat.

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