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More layoffs possible for AT&T Wireless; some jobs go to India

By Brier Dudley
Seattle Times technology reporter

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As part of its effort to cut costs and improve its profit margin, the company might go beyond the 1,900 layoffs disclosed last week. It is consolidating operations in Redmond and New Jersey and moving tasks such as Web-site operations to vendors in India.

Yesterday, it hired Hewlett-Packard to provide desktop computer support for its employees.

"We are looking at all aspects of our operation to see where we can gain efficiencies," spokesman Mark Siegel said.

The moves are being cited by a Seattle labor group floating plans for legislation addressing the use of overseas technology vendors. WashTech, a subsidiary of the Communications Workers of America, wants companies to disclose when they make employees train foreign workers who may take their jobs.

Meanwhile, it remains to be seen how many will be left at the company that began as McCaw Cellular Communications. It now employs 5,500 in Washington and about 31,000 nationally, but executives are aggressively trying to cut costs.

While the company has been forthright about overall cost reductions, job-cut details have come in spurts, including in a quarterly report to investors last week that noted the 1,900 layoffs. The report also said a few hundred workers will be added at the Redmond headquarters and that decisions about additional cuts might be made in the fourth quarter.

The Wall Street Journal, without naming its source, reported yesterday that 3,000 more layoffs are planned.

AT&T Wireless spokesmen would not confirm The Journal story but acknowledged more cuts are possible.

"We have not made decisions along the lines that you see described in the Journal," Siegel said.

Another spokesman initially said the company won't reduce employment in Washington state, but later retracted the statement.

"I can't categorically say at the end of next year whether we're going to be up or down," Peter Rowe said, adding the company is hiring locally.

In response to the media attention, Chief Information Officer Christopher Corrado issued a memo acknowledging the company is using outside vendors to reduce costs and improve profit margins.

The memo also said the company yesterday hired Hewlett-Packard to provide desktop-computer-support services to employees. It did not say how many jobs would be affected.

AT&T Wireless has not recently filed public notices required when companies lay off 100 or more employees. The only work-force-adjustment notice it filed with the state was for 544 jobs cut in October 2001.

The situation is unsettling for employees, said an information-technology worker at the Bothell campus who expects layoffs in his department next year. He said his group is training vendors from India-based Wipro to run its back-office systems.

"They're trying not to be pinned down about anything, but we see the people in there that we're training and we see the numbers and know that in January we're going to start getting the notices," he said.

The company would not comment on arrangements with Wipro or other outside vendors.

WashTech is using developments at AT&T Wireless in its push to discourage the overseas outsourcing of technology jobs.

Organizer Marcus Courtney also distributed an internal AT&T Wireless document outlining a project transferring Web-site management and other tasks to Tata Consultancy Services. It says two local jobs are being eliminated and will be handled by two people working for Tata in India.

"What we're hoping to accomplish by this is highlighting the fact that leading employers in this country are exporting some of our best-paying jobs with good benefits overseas in order to slash their labor costs," Courtney said. "They're doing so in a way that they're flying in workers, forcing local employees to train their replacements."

Siegel said AT&T Wireless has to change to become more efficient.

"Our employees are really behind this effort," he said, "because they understand that for us to continue to be a vibrant, healthy, leading company, we have to continually drive unnecessary costs out of the business, we have to continually reinvent the way we do business so we're doing it efficiently."

Brier Dudley: 206-515-5687 or bdudley@seattletimes.com

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