The Seattle Times: Eastside News: AT&T Wireless to lay off 220

As the AT&T Wireless board evaluated takeover offers thought to have reached $38 billion or more, the company confirmed yesterday it would lay off 220 information-technology workers around the country by the end of March.

The Redmond-based wireless carrier said it started telling employees yesterday whether they would be losing their jobs. This round of job cuts will include 150 workers from the company's Bothell offices, where half of its 3,000 IT workers are based.

The cuts come as a high-stakes auction to acquire the company focuses on the two bidders, Cingular Wireless and Vodafone Group. AT&T Wireless' decision on who will win could be made soon, producing what would be the largest acquisition in Northwest history.

Since Friday, when offers for the company were due, a bidding war has pitted Atlanta-based Cingular against Vodafone, the world's largest wireless company, based in Newbury, U.K. But published reports, quoting unidentified sources, said Cingular and Vodafone had submitted similar bids Friday and were asked to resubmit their offers, which by yesterday had apparently grown to the $38 billion range, or about $14 a share.

Vodafone yesterday was weighing raising its offer to as much as $39.4 billion, or about $14.50 a share, while Cingular was standing firm at $38 billion, sources familiar with the situation said last night. Vodafone planned to hold a board meeting this morning, sources said.

AT&T's board gathered in New York yesterday to mull over the offers. The board may favor Vodafone's bid partly because it's less likely to face antitrust opposition than the bid from Cingular, people familiar with the matter said. AT&T Wireless declined comment on the auction.

AT&T Wireless, the third-largest carrier in the U.S., put itself up for sale last month after receiving interest from a number of suitors.

The timing of the layoffs and the company's sale are not connected and are a coincidence, said company spokesman Jeremy Pemble.

The layoffs had been the subject of rumor and discussion. Last week, the company declined to say when or how many layoffs were planned. Employees said they had been told that about 1,000 workers would be let go.

Pemble said yesterday that the number of jobs involved was less than a quarter of that figure and that official notices won't be handed out until later this month. That would allow affected employees to stay on until the end of March.

The layoffs had been expected since November, when AT&T Wireless said in a Securities and Exchange Commission filing that it was trimming its nationwide headcount of 31,000 by about 1,900 employees. As of September, the company said in the filing, 800 jobs had already been cut and the rest were expected this year.

Since then, employee morale has plummeted as workers have had to deal with uncertainties, including the sale of the company.

But one employee who learned yesterday that he would be let go said he thought he had won the lottery because of the hefty severance package.

For others, it was business as usual.

Chris Crowell, a program manager in the IT group, said he frequently hears two reactions from employees. "It's either I'm worried about losing my job or worried about this merger," he said, "or there's some who have felt for a long time that we should be running more efficiently. They've been waiting for positive signs that we are doing that, and they say it's about time."

Although a majority of the cuts will occur in Washington state, Pemble said, the company still employs more people here today than it did a year ago. Part of this is because of a cost-cutting strategy to consolidate its offices around the country to either Redmond or its offices in New Jersey.

Pemble said AT&T has 5,700 employees in Redmond and Bothell, or about 270 more than it did a year ago. But he said more IT job cuts are expected by the end of the year.

Material from The Associated Press and Bloomberg News is included in this report. Tricia Duryee: 206-464-3283 or tduryee@seattletimes.com

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