AT&T Continues Restructuring and Cost Reduction Effortstitlestyle>.abt5{position:absolute;clip:rect(413px,auto,auto,413px);}stylediv class=abt5>Get now Pans Online from a href=http:

Non-cash asset impairment charge of $11.4 billion
Continued workforce reductions, resulting in 3Q04 charge of $1.1 billion
Year end net debt to be under $7.0 billion

AT&T  announced a series of restructuring actions as the company continues its transformation in the rapidly changing communications industry.

The company said that the previously announced review of its assets will result in an asset impairment charge in the third quarter of 2004. As a result, AT&T will take a non-cash charge of approximately $11.4 billion in the third quarter of 2004 to recognize the asset impairment.  This action will reduce AT&T's depreciation expense by approximately $1.0 billion in the second half of 2004.

AT&T also said that as a result of its decision to stop marketing traditional residential services, as well as corporate transformation initiatives, it will significantly exceed its previously estimated workforce-reduction target of 8 percent in 2004.  The company now expects to reduce total headcount by more than 20 percent in 2004.

AT&T's acceleration of workforce reductions and other cost-cutting initiatives are having a positive impact on profitability across the business. The company is also beginning to benefit from lower marketing expense as it scales back its traditional consumer operation.