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CROOK NEWS: JNPR Downgrades in front of AT&T Writedowns

AT&T unveils more job cuts, charges
By Jeffry Bartash, CBS.MarketWatch.com
Last Update: 4:29 PM ET Oct. 7, 2004

WASHINGTON (CBS.MW) - AT&T on Thursday said it will cut thousands of additional jobs and write down the value of its network assets by $11.4 billion, a move that will boost future profits. The company's widely expected announcement came shortly after markets closed Thursday. Under its latest reorganization, AT&T (T: news, chart, profile) said it will end up reducing its workforce by 20 percent in 2004, well above its prior target of 8 percent.

The company started the year with about 61,000 workers. A 20 percent reduction means that roughly 12,000 jobs are slated for extinction by the end of 2004. Many of those employees have already been let go or notified.

The latest round of layoffs will result in a onetime expense of $1.1 billion in the third quarter, the company said.

The company recently decided to stop marketing phone service to consumers after a series of regulatory setbacks that AT&T said makes it more difficult to service those accounts. Most of the job cuts are expected to occur in the consumer division. In addition, AT&T said it will reduce the value of its network in the third quarter. Wall Street analysts say that could elevate 2005 earnings by as much as $1 a share. On Thursday, AT&T stock closed down 16 cents at $15.04.