The Grim Reaper returns to SBC

By Susan Rush
from CED Broadband Direct, May 15, 2002

SBC Communications Inc. is paring its workforce once again in response to the lagging economy and stringent regulatory requirements.

The company plans to cut 5,000 jobs during the second quarter. In the past two quarters, SBC reduced its employee roster by 10,000, and announced plans last month to cut 4,000 jobs over the last three quarters of 2002.

SBC contends rules set by U.S. policymakers are holding the company back. "As the rules stand now, SBC is discouraged from investing in new infrastructure or new jobs. These rules are not economically rational and they are uncertain at best," SBC President William Daley said in a statement. Earlier this week, the regional Bell companies were dealt a blow when the Supreme Court ruled against a request to seek higher lease payments from competing phone companies to cover the cost of their network investments.

The fight against regulatory restrictions is not new at SBC. Company Chairman and CEO Ed Whitacre has claimed regulations imposed on SBC were holding the company back -- especially since its archrivals, the cable companies, were not subject to the same restrictions. In October of last year, SBC scaled back its Project Pronto digital subscriber line initiative. The company has said that until the playing field is leveled in the contest with cable, aggressive DSL rollouts won't be profitable.

This latest round of cuts will be completed by the end of June and will affect employees in Arkansas, California, Connecticut, Illinois, Kansas, Michigan, Missouri, Nevada, Ohio, Oklahoma, Texas and Wisconsin.