SBC plans post-takeover job cuts

US phone company SBC Communications said it expects to cut around 12,800 jobs following its $16bn (£8.5bn) takeover of former parent AT&T.

SBC said 5,125 positions would go as a result of network efficiencies. Another 1,700 will go from its sales department, 3,400 from business operations and 2,600 across legal, advertising and public relations. SBC currently employs 163,000 people while AT&T employs 47,000. The takeover was announced on Monday. The deal will be financed with $15bn of shares as well as a $1bn special dividend paid to AT&T shareholders.

It effectively marks the end of AT&T, which was founded in 1875 by telephone pioneer Alexander Graham Bell and is one of the US's best-known companies. SBC and AT&T said estimated cost savings of at least $2bn from 2008 were a main driver for the merger. AT&T is a long-distance telecoms firm, while SBC is mainly focused on the local market in the western US. Both also have data network businesses. The takeover is subject to approval by AT&T's shareholders and regulators. The companies said they expected to complete the agreement during the first half of 2006.
