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AT&T plans to cut up to 10,000 jobs

Post-merger move expected to save $3 billion a year

NEW YORK -- AT&T Inc. plans to cut up to 10,000 jobs over three years, mostly through normal turnover, if its $67 billion purchase of BellSouth Corp. is approved by shareholders and regulators, AT&T's chief financial officer, Rick Lindner, said yesterday.

Before the cuts, the combined company would have around 317,000 employees, including Cingular Wireless LLC, already an AT&T-BellSouth joint venture.

The new company, to be called AT&T Inc., would be the country's largest phone company -- with nearly half of all lines. It also would be the largest cellphone carrier and the largest provider of broadband Internet service.

Still, investors and analysts expect it to pass regulatory muster, because phone companies are facing increasing competition, especially from cable operators.

The 10,000 planned job cuts are in addition to the 26,000 cuts AT&T has already announced -- 13,000 due to SBC's acquisition of AT&T Corp., which closed in November, and 13,000 due to shifting business priorities.

At the Communications Workers of America, which would have about 200,000 workers at the combined company, spokeswoman Candice Johnson said the merger would be a ''good opportunity for job growth" as the company expands into new technologies. The union has not yet endorsed the merger.

San Antonio-based AT&T expects the acquisition to save it $2 billion annually at first, increasing to $3 billion a year by 2010. Slightly more than one third of the savings would come from reduced labor costs and consolidation of support functions and corporate staff, Lindner said.

More savings would come from reduced advertising expenses and combining the backbone network and information-technology operations of the companies.

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