AT&T Restructuring: A New Era for the Communications Giant

AT&T's recent restructuring into three separate companies will significantly impact its services and equipment businesses, but existing relationships with fiber optic customers and vendors are expected to remain unchanged in the short term. The reorganization, set to unfold over the next 15 months, will lead to a less symbiotic relationship between services and equipment, potentially opening up networking contracts to outside vendors. This move is expected to make AT&T's equipment company more aggressive in the marketplace and less dependent on its own business.

Key Takeaways:

• The restructuring will result in the creation of three separate companies: Communications Services, Communications Equipment, and Transaction-Intensive Computing.
• Communications Services will continue to bear the AT&T name, while Communications Equipment and Transaction-Intensive Computing will not.
• The Transaction-Intensive Computing company will eliminate approximately 8,500 jobs from its 43,000-employee base.
• Robert Allen will chair the Communications company, marking one of the few announced corporate officer roles.
• The reorganization is expected to be completed by the end of 1996.
• AT&T's equipment company will no longer produce personal computers.
• The restructuring aims to make decisions easier and more efficient, as stated by Terry Romano, AT&T Network Systems spokesman.

Statistics:

• The Transaction-Intensive Computing company will eliminate 8,500 jobs, representing approximately 20% of its 43,000-employee base.
• The reorganization is expected to take 15 months to complete.
• The total number of employees across the three new companies is approximately 43,000.
• The Transaction-Intensive Computing company will cease production of personal computers.
• The reorganization aims to make AT&T more aggressive in the marketplace and less dependent on itself for business.

Sources:

• Spokesman Terry Romano, AT&T Network Systems.
• STAC Reports.