SBC Plans To Cut Jobs, Capital Expenses

[TexasStooge]

FORT WORTH, Tex -- SBC Communications Inc. will cut jobs and reduce capital spending in response to lower demand for its core local telephone business, Chairman and Chief Executive Edward Whitacre Jr. said.

Whitacre didn't give details about the number or timing of layoffs.

A spokesman said Whitacre's comments Tuesday to an investment banking conference in Boston were "consistent with what we've said in the past."

"Our core business continues to decline because there is lower demand and, of course, because of the economy," spokesman Larry Solomon told the Fort Worth Star-Telegram.

Solomon said the layoffs would be companywide and would include cuts in call centers and network centers. SBC will add jobs in sales and marketing, he said.

The San Antonio-based phone company has about 175,000 employees.

Whitacre said SBC's capital expenditures for the year would be about $5 billion and decline in 2004. SBC said in January that it expected to spend $5 billion to $6 billion for the year, down from the $6.8 billion it spent last year.

Company officials say federal rules designed to boost competition for local phone service have reduced SBC's incentive to invest in its network.

Last month, the Federal Communications Commission issued rules that would continue to give states powers to require regional Bell companies such as SBC to lease parts of their phone networks to competitors at wholesale prices.

SBC, the largest local phone provider in Texas, continues to lose local phone access lines because of increased competition from local and long-distance carriers such as MCI and AT&T.

Whitacre said SBC continues to see strong growth in its high-speed Internet access business. He said the company has signed up 3 million customers.

"We continue to see strong customer growth in our DSL business as more customers and businesses move to broadband," Whitacre said. "DSL is the key product in our fast-growing data business."

In midday trading Wednesday on the New York Stock Exchange, SBC shares rose 33 cents to $23.25.

[wx247]

I am sorry about SBC workers losing their jobs, but this company is out of control. They essentially have a monopoly over phone service here in SW Missouri and charge TOO MUCH $$$!