THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Saturday, August 13, 1994 TAG: 9408130261
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: FROM WIRE REPORTS
DATELINE: PHILADELPHIA LENGTH: Medium: 61 lines
Bell Atlantic Corp.'s aggressive cost cuts apparently will continue with more layoffs and office closings.
An internal company memo came to light describing Bell Atlantic's plans to further slash its costs, which are among the industry's lowest, in the face of high-tech competition.
The Baltimore Sun revealed the memo Friday. Bell Atlantic refused to publicly discuss the matter. But utility stock analysts expressed no surprise.
``They have been as aggressive as any of the Bells in lowering their cost structure,'' said stock analyst Blake Bath. ``It's just an attempt to continue to be out in front of the curve.''
The report comes as Bell Atlantic braces for more competition in the local telephone market and seeks to offer cable television services.
The Sun said the memo cites competition as the driving force behind the cuts.
The memo says Bell Atlantic will announce on Tuesday a ``sweeping accounting change and plans to achieve continued, aggressive cost reductions through center consolidations, elimination of jobs, increased spans of control and other measures,'' according to the Sun's report.
Bath estimated Bell Atlantic could take a charge of $2 billion to $4 billion for changing its accounting method for depreciating its plants and equipment.
The unsigned Aug. 3 memo said the company will reveal the changes Tuesday morning. Spokeswoman Cynthia Ciangio said company policy is to neither confirm nor deny speculation on its plans.
Shares of the Philadelphia-based company closed up 1/2 to 57 1/2 on trading of 471,000 shares; its daily average is 419,800 shares.
Bell Atlantic and the six other regional Bell operating companies are striving to reduce costs in anticipation of increased competition in almost every aspect of their business.
Cellular companies have eaten away at the market for local phone calls, and independent local-service companies have built fiber-optic networks to compete for large business customers.
Cable companies pose an increasing threat. This week, several of the largest cable companies said they would collectively spend more than $2 billion to buy equipment that will enable their vast networks to offer phone services.
Thursday, a Senate committee approved a bill to rewrite telecommunications policy. Local phone and cable companies could compete head-to-head in each other's markets, and the Bells could offer long-distance services.
Bell Atlantic has been ahead of its counterparts in keeping its workforce level down. At the end of 1993, it ranked second among the Bells in employees per 10,000 access lines, with 33. Ameritech Corp. was the leanest, with 31. Since 1990, Bell Atlantic has cut its workforce 10 percent, by 8,500, to 73,100. by CNB