Newspaper article St Louis Post-Dispatch (MO)

Gte Overhaul to Cost 17,000 Jobs

Newspaper article St Louis Post-Dispatch (MO)

Gte Overhaul to Cost 17,000 Jobs

Article excerpt

GTE Corp. will cut 17,000 jobs and charge $1.8 billion against profits as it attempts to keep pace with rapid technological innovations that are changing the way it and other phone companies do business.

The job cuts - to be carried out over three years, mostly through layoffs - will affect about 25 percent of the phone-related jobs at GTE, the nation's largest local phone company.

GTE has 650 employees in the St. Louis area, most of them at a regional office in Wentzville. The effect of the layoffs on employees here hasn't been determined, said Dana Benton, a GTE spokeswoman.

The cuts are similar to but bigger than those made at several regional Bell operating companies, which also face the end of their monopolies on local phone service as advances in wireless phoning and computers make traditional regulatory barriers meaningless.

"Technology is driving our industry," said Charles Lee, chairman and chief executive of GTE. "No matter what the legislature, the administration or the regulators do, we're going to have a competitive marketplace in the not-too-distant future. And we have to have competitive costs."

GTE, based in Stamford, Conn., employs 130,000 overall. Its telephone operations subsidiary, which provides about 75 percent of its $20 billion in annual revenue, is based in the Dallas suburb of Irving.

The company provides phone service in 7,500 communities in 31 states, two Canadian provinces and the Dominican Republic. Its customers are in areas not served by the regional Bell companies. It also publishes 900 telephone directories and provides cellular phone service.

Since 1988, GTE has reduced its telephone operations work force to 73,000 employees from 100,000. But its costs remain higher than at the Baby Bell companies.

"We need to improve more, and that's part of this program. And they're all improving too," Lee said.

"I very seriously think this is a major defining moment and is the last major restructuring change, but I can't say that with a lot of confidence."

The pre-tax $1.8 billion charge will be taken against fourth-quarter profit. The cuts are expected to save the company $1 billion annually. …

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