AT&T, DuPont, Viacom Fire 15,000 Workers as U.S. Slump Worsens

AT&T Inc., DuPont Co. and Viacom Inc. are firing more than 15,000 people, buckling under the strain of a recession that may already have pushed the U.S. jobless rate to the highest level in 15 years.

AT&T, the biggest U.S. phone company, announced plans today to slash 12,000 jobs, or 4 percent of the workforce. Chemical maker DuPont will dismiss 2,500 workers, and Viacom, which owns MTV Networks and Paramount Pictures, announced 850 job cuts.

More than 1 million people in the U.S. have lost their jobs this year as the economic slump deepens, bringing the amount of people collecting jobless benefits to a 26-year high as of last month. Companies probably will slash payrolls further in the next two months, said John Challenger, chief executive officer of Challenger, Gray & Christmas Inc.

“We’re probably in for some months ahead that are going to be some very tough sledding,” Challenger told Bloomberg Television today from Chicago. “There used to be a taboo that companies did not lay off a lot between Thanksgiving and the New Year. That’s all changed, and those have been very heavy over the last few years.”

AT&T joined State Street Corp. and mining company Freeport- McMoRan Copper & Gold Inc. in cutting jobs this month to cope with the deepening economic crisis, spurred by a spate of bank failures that froze up credit. Financial-services firms have posted almost $1 trillion in credit losses or writedowns tied to the collapse of the subprime-mortgage market.

A larger-than-anticipated 4.09 million Americans are getting jobless benefits, the most since 1982, the Labor Department said today in Washington. A Labor report tomorrow may show payrolls fell by 330,000 in November, the biggest one-month drop since 1982, according to a Bloomberg survey. The unemployment rate probably climbed to 6.8 percent, the highest since 1993.

Being Cautious

U.S. job cuts more than doubled in November from a year earlier, Challenger, Gray & Christmas said yesterday in a report. Companies have announced 1,057,645 cuts this year, the first time they’ve surpassed that total since 2005, the job-placement firm said.

While financial companies had the biggest number of job cuts last month, with 91,356 reductions, the retail industry showed the second-worst performance, with 11,073, and probably will deteriorate, Challenger said.

“Retailers are being very cautious on hiring,” he said. “As we move into December and January, the cuts are likely to be larger in those areas as more companies close stores or even file for bankruptcy.”

AT&T is shifting its focus to a growing wireless business as customers get rid of their home-phone lines, favoring mobile devices. Companies have curbed spending on phones and service as they shed employees, leading to a ripple effect at carriers like AT&T, said Christopher King, an analyst at Stifel Nicolaus & Co.

Companies Exposed

“These companies have never been as exposed to the enterprise segment as they are now,” said King, who is based in Baltimore. “Companies are simply going to be spending less.”

DuPont’s reductions equal about 4 percent of its workforce. The company forecast a fourth-quarter loss of about 20 cents to 30 cents a share, leaving out reorganization costs, down from an earlier prediction of a profit. The firings will come mostly in units that serve the automotive and construction markets in the U.S. and Western Europe, the Wilmington, Delaware-based company said today.

Viacom’s cuts will be spread across all divisions of the company, the New York-based company said today. Viacom will also write down the value of some assets.

AT&T fell 33 cents to $28.75 at 11:32 a.m. in New York Stock Exchange composite trading. DuPont rose 21 cents to $23.82, and Viacom advanced 6 cents to $14.56.