Cingular Wireless LLC will cut about 10 percent of its 68,000 jobs over the next 12 to 18 months as it combines operations with the recently acquired AT&T Wireless, the chief executive of the nation’s largest cell phone company said Tuesday in an interview.
Many of the 7,000 or so job cuts will come from administrative ranks, while relatively few if any would come from customer service, CEO Stan Sigman told The Associated Press.
No cuts are expected until January to prevent disruptions during the key holiday-selling season. Company officials are still working on the exact numbers, and the cuts will be spread out over more than a year, he said.
“It’s not going to be in the big groups of people. The big groups of people are in customer care,” Sigman said. “This isn’t about closing stores or distribution channels, nothing like that.”
Sigman stressed that Cingular’s goal would be to hire those employees back over time as the company expands its current subscriber base of 47.25 million.
“There will be people that will be affected by this, absolutely,” Sigman said. “If you go to Redmond, Wash., where AT&T Wireless is based, there’s anxiety there about how this is going to affect them and what is the impact on them. I’ve made a commitment that there will not be any forced layoffs until the first of the year.”
Cingular, a joint venture of Atlanta-based BellSouth Corp. and San Antonio-based SBC Communications Inc., hopes to achieve billions of dollars in cost savings through the merger, which gave the company about 5 million more subscribers than former market leader Verizon Wireless.
After completing the $41 billion purchase of AT&T Wireless Services Inc. last month, Cingular asserted that no decisions about jobs cuts would be announced until the start of 2005.
But on Tuesday, asked if Cingular planned to cut more than 10 percent of its work force, Sigman said, “That’s probably close.”
The expected cuts are not related to the 10,000 or more positions which SBC recently disclosed plans to eliminate. Those cuts, about 6 percent of SBC’s work force, are to be made by the end of 2005 through a combination of layoffs and attrition.
Some analysts have suggested that Verizon Wireless, which has 42.1 million customers, could eventually retake the No. 1 spot because it has been adding customers at a much faster rate than Cingular.
Also, since both Cingular Wireless and AT&T Wireless are already losing customers to rivals at a faster rate than Verizon, any service glitches during the integration of the two businesses could prove costly.
'Fire in my belly'
But Sigman, who at times pounded his fists on his chair to emphasize a point, asserted that the merger is running smoothly so far and that he is committed to holding the No. 1 spot.
“There are little minimal problems, a little system problem, a system in any market being down for a period of an hour or two, some training problems,” he said. A smooth integration is “a passion that I have. It’s also a hatred that I have that we’re not already there. Everyday that we’re not there, I hate it.”
While the company is No. 1 in customers, Sigman said the company is still middle of the pack on other important measures like reputation.
“If Verizon overtakes our customer count in the next six to 12 months, then I’ve failed,” he said. “I’m a very competitive person.”
On other subjects, Sigman said Cingular is still assessing what its regulatory recovery fee will be on customers’ bills in 2005.
Verizon Wireless and Sprint Corp. said last week they were lowering surcharges to defray costs for complying with a federal order to let customers keep the same cell phone numbers when switching to a different service provider. Both companies said the expense had declined since the rules took affect one year ago.
Cingular charges from 52 cents to $1.25 a month for regulatory recovery, while AT&T Wireless charges $1.75. Asked about his future, Sigman, a 57-year-old Texas native, said he plans to stay on as CEO for some time. He’s been in the industry for 40 years.
“I still have a fire in my belly. I’m not ready to retire,” Sigman said.