AT&T
AT&T May Cut Benefits
03/26/10
NEW YORK – AT&T Inc. will take a $1 billion non-cash accounting charge in the first quarter because of the health care overhaul and may cut benefits it offers to current and retired workers.
The charge is the largest disclosed so far. Earlier this week, AK Steel Corp., Caterpillar Inc., Deere & Co. and Valero Energy announced similar accounting charges, saying the health care law that President Barack Obama signed Tuesday will raise their expenses. On Friday, 3M Co. said it will also take a charge of $85 million to $90 million.
All five are smaller than AT&T, and their combined charges are less than half of the $1 billion that AT&T is planning. The $1 billion is a third of AT&T's most recent quarterly profit. In the fourth quarter of 2009, the company earned $3 billion on revenue of $30.9 billion.
AT&T said Friday that the charge reflects changes to how Medicare subsidies are taxed. Companies say the health care overhaul will require them to start paying taxes next year on a subsidy they receive for retiree drug coverage.
White House spokesman Robert Gibbs said Thursday that the tax law closed a loophole.
Under the 2003 Medicare prescription drug program, companies that provide prescription drug benefits for retirees have been able to receive subsidies covering 28 percent of eligible costs. But they could deduct the entire amount they spent on these drug benefits — including the subsidies — from their taxable income.
The new law allows companies to only deduct the 72 percent they spent.
AT&T also said Friday that it is looking into changing the health care benefits it offers because of the new law. Analysts say retirees could lose the prescription drug coverage provided by their former employers as a result of the overhaul.
Changes to benefits are unlikely to take effect immediately. Rather, the issue would most likely come up as part of contract negotiations between the company and unions representing its employees and retirees. AT&T is the largest private employer of union workers in the U.S.
Candice Johnson, spokeswoman for the Communications Workers of America, which represents more than 160,000 AT&T workers, said these employees have contracts in place until 2012. An agreement covering retirees also runs through 2012.
AT&T rival Verizon Communications Inc. was among 10 companies that sent a letter to congressional leaders in December warning that their costs would increase with the health care changes. Verizon spokesman Peter Thonis said the company had no comment.
Shares in AT&T, which is based in Dallas, climbed 9 cents to close Friday at $26.24.
The charge is the largest disclosed so far. Earlier this week, AK Steel Corp., Caterpillar Inc., Deere & Co. and Valero Energy announced similar accounting charges, saying the health care law that President Barack Obama signed Tuesday will raise their expenses. On Friday, 3M Co. said it will also take a charge of $85 million to $90 million.
All five are smaller than AT&T, and their combined charges are less than half of the $1 billion that AT&T is planning. The $1 billion is a third of AT&T's most recent quarterly profit. In the fourth quarter of 2009, the company earned $3 billion on revenue of $30.9 billion.
AT&T said Friday that the charge reflects changes to how Medicare subsidies are taxed. Companies say the health care overhaul will require them to start paying taxes next year on a subsidy they receive for retiree drug coverage.
White House spokesman Robert Gibbs said Thursday that the tax law closed a loophole.
Under the 2003 Medicare prescription drug program, companies that provide prescription drug benefits for retirees have been able to receive subsidies covering 28 percent of eligible costs. But they could deduct the entire amount they spent on these drug benefits — including the subsidies — from their taxable income.
The new law allows companies to only deduct the 72 percent they spent.
AT&T also said Friday that it is looking into changing the health care benefits it offers because of the new law. Analysts say retirees could lose the prescription drug coverage provided by their former employers as a result of the overhaul.
Changes to benefits are unlikely to take effect immediately. Rather, the issue would most likely come up as part of contract negotiations between the company and unions representing its employees and retirees. AT&T is the largest private employer of union workers in the U.S.
Candice Johnson, spokeswoman for the Communications Workers of America, which represents more than 160,000 AT&T workers, said these employees have contracts in place until 2012. An agreement covering retirees also runs through 2012.
AT&T rival Verizon Communications Inc. was among 10 companies that sent a letter to congressional leaders in December warning that their costs would increase with the health care changes. Verizon spokesman Peter Thonis said the company had no comment.
Shares in AT&T, which is based in Dallas, climbed 9 cents to close Friday at $26.24.
AT&T To Cut 75 Connecticut Jobs
10/21/09
By ERIC GERSHON
The Hartford Courant
AT&T plans to cut 75 positions from its Connecticut workforce by mid-November, part of a nationwide reduction due to declines in the telecommunications giant's land-line business. Announced Tuesday, the cuts amount to just over 1 percent of the company's state workforce and are part of 2,500 cuts nationwide, according to the Communications Workers of America Local 1298, which represents AT&T workers in Connecticut. "We've lost millions of land lines in recent years as customers have gone to other technologies or providers," said Walt Sharp, an AT&T spokesman based in Dallas. "When you have fewer wireline customers, you need fewer people to provide services." AT&T has already cut more than 1,000 jobs in the state within the last two years. Many of the latest local cuts will come from a call center in Meriden, where workers gathered Wednesday afternoon to protest the job reductions. Sharp said the cuts will be completed in 45 days. They will come through voluntary buyouts and, if necessary, layoffs. All workers would be offered other jobs elsewhere in the state, but there will still be a net reduction of 75.
See full article at http://www.courant.com/business/hc-att-job-cuts-0923,0,2396040.story
The Hartford Courant
AT&T plans to cut 75 positions from its Connecticut workforce by mid-November, part of a nationwide reduction due to declines in the telecommunications giant's land-line business. Announced Tuesday, the cuts amount to just over 1 percent of the company's state workforce and are part of 2,500 cuts nationwide, according to the Communications Workers of America Local 1298, which represents AT&T workers in Connecticut. "We've lost millions of land lines in recent years as customers have gone to other technologies or providers," said Walt Sharp, an AT&T spokesman based in Dallas. "When you have fewer wireline customers, you need fewer people to provide services." AT&T has already cut more than 1,000 jobs in the state within the last two years. Many of the latest local cuts will come from a call center in Meriden, where workers gathered Wednesday afternoon to protest the job reductions. Sharp said the cuts will be completed in 45 days. They will come through voluntary buyouts and, if necessary, layoffs. All workers would be offered other jobs elsewhere in the state, but there will still be a net reduction of 75.
See full article at http://www.courant.com/business/hc-att-job-cuts-0923,0,2396040.story