AT&T cutting 12,000 jobs, lowers capital spending

NEW YORK (Reuters) - Top U.S. phone company AT&T Inc. said on Thursday it would eliminate 12,000 jobs, about 4 percent of its workforce, as it joins a raft of corporations trying to slash costs in the face of the economic downturn.

AT&T will cut the jobs over the remainder of 2008 and 2009, and take a charge of about $600 million in this year's fourth quarter for severance.

The carrier plans to cut its 2009 capital spending from this year's levels, though actual spending plans have not yet been finalized. AT&T said it would provide details on its capital spending in late January.

Shares of AT&T were down 2.5 percent in pre-market trade following news of the job cuts, which the company attributed to "economic pressures, a changing business mix and a more streamlined organizational structure."

Shares of AT&T have dropped by about 30 percent so far this year, as the company has looked for ways to make up for the rapid decline in traditional wireline customers. To help, it has increasingly turned to wireless and high-speed