AT&T merger to claim 10,000 jobs

AT&T already has plans to cut 13,000 staff

Telecoms giant AT&T has said it expects to cut 10,000 jobs following its $67bn (£38.2bn) takeover of rival BellSouth.

The US operator said the staff cuts would be made by 2009 in a move to reduce costs at the combined group.

The new cuts are in addition to 13,000 job losses over three years already announced by AT&T, following a previous US telecoms merger.

AT&T said on Monday that it would buy BellSouth, creating a US sector giant with a market capitalisation of $165bn.

The deal also gives AT&T full ownership of Cingular Wireless, America's biggest mobile phone firm, catapulting the combined group ahead of its nearest US rival, Verizon Communications.

Baby Bell

Analysts broadly welcomed the news of AT&T's bid, although some questioned whether the company was paying too much for BellSouth.

AT&T said the job cuts would represent about 40% of the proposed $18bn cost savings it hopes to achieve from the deal.

Texas-based AT&T currently employs about 190,000 people, while BellSouth, which has its headquarters in the state of Georgia, employs about 63,000 staff.

If, as is expected, regulators approve AT&T's bid, the takeover will see BellSouth return to its old stable.

It and several other operators - dubbed the Baby Bells - were spun off from AT&T in the 1980s.

Separately, analysts said the AT&T deal - which would bring Cingular Wireless under the control of a single company - added to pressure on rival Verizon to resolve ownership issues at its jointly-run mobile phones division.

Verizon is keen to acquire the 45% of Verizon Wireless it does not own from British mobile phone giant Vodafone.