AT&T Breakup Creates Separate Hardware Firm - Twice

AT&T Breakup Creates Separate Hardware Firm

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AT&T Consumer Products, the nation's leading marketer of telephones and answerers, will be moving into a new company, getting new management, and possibly (although not probably) searching for a new brand name under a revamp that will take AT&T out of the computer business.

The dramatic announcement made by AT&T chairman Bob Allen that the communications giant was to be split up into three different companies took nearly everyone, including AT&T employees, by surprise.

The plan calls for AT&T to retain communications services, while most hardware operations, including consumer products, get spun off as a new unnamed company, and computer operations (the former NCR) become the independent Global Information Services (GIS).

Consumer Products, which has annual sales of about $2 billion, will be part of a $20 billion hardware entity with 11,000 employees.

Consumer Products Group president Carl Ledbetter will remain with AT&T in its Consumer Communications Services organization. Taking his place as interim group president is Bill Marks, executive VP-CEO of AT&T's multimedia products group. In addition, Homa Firouztash has been promoted to marketing VP, sales and product management.

Although AT&T will retain all rights to its brand, it is likely the company would grant a request by the consumer operation for a license to continue to use the name and logo on its line of telephone products, according to AT&T spokesman Dave Bikle.

In addition, the 350 AT&T Phone Centers operated by Consumer Products are expected to remain open. "They are valuable retail outlets," Bikle states.

For the most part, Consumer Products employees won't be moving, he says. "Almost all of us will stay in our current offices and do our current jobs." In the restructuring overall, "many people will work for a different company, but will be doing the same job."

In one major change, AT&T has dropped plans to launch its Home Center TV set-top box and related information service announced at the past Winter CES with much fanfare.

"We don't think the market is ready for this kind of consumer product," Bikle says. "The reaction from consumers and retailers didn't seem strong enough, and the perceived value didn't justify the $350 price tag. Also, we didn't get the critical mass of service providers to go ahead with it."

However, he adds, "we think there is potential and will continue to watch the market."

AT&T's revamp will have a major impact at GIS, which will be exiting the consumer PC business and laying off approximately 8,500 of its 43,000 employees. According to Bikle, it will continue to offer PCs only as part of a solution to business problems.◊[text]Information Services (GIS).

Consumer Products, which has annual sales of about $2 billion, will be part of a $20 billion hardware entity with 11,000 employees.

Consumer Products Group president Carl Ledbetter will remain with AT&T in its Consumer Communications Services organization. Taking his place as interim group president is Bill Marks, executive VP-CEO of AT&T's multimedia products group. In addition, Homa Firouztash has been promoted to marketing VP, sales and product management.

Although AT&T will retain all rights to its brand, it is likely the company would grant a request by the consumer operation for a license to continue to use the name and logo on its line of telephone products, according to AT&T spokesman Dave Bikle.

In addition, the 350 AT&T Phone Centers operated by Consumer Products are expected to remain open. "They are valuable retail outlets," Bikle states.

For the most part, Consumer Products employees won't be moving, he says. "Almost all of us will stay in our current offices and do our current jobs." In the restructuring overall, "many people will work for a different company, but will be doing the same job."

In one major change, AT&T has dropped plans to launch its Home Center TV set-top box and related information service announced at the past Winter CES with much fanfare.

"We don't think the market is ready for this kind of consumer product," Bikle says. "The reaction from consumers and retailers didn't seem strong enough, and the perceived value didn't justify the $350 price tag. Also, we didn't get the critical mass of service providers to go ahead with it."

However, he adds, "we think there is potential and will continue to watch the market."

AT&T's revamp will have a major impact at GIS, which will be exiting the consumer PC business and laying off approximately 8,500 of its 43,000 employees. According to Bilke, it will continue to offer PCs only as part of a solution to business problems.

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