AT&T said it will cut about 4,600 jobs, or roughly 1.5% of its work force, as it integrates several businesses and streamlines operations, The Associated Press reported Friday.

AT&T (NYSE: T) also said it plans to take a $374 million first quarter, pre-tax charge in connection with the job cuts, The AP reported. The company added that, longer-term, the jobs cuts will be offset by staff additions as it invests in growth areas. The company had about 309,000 employees as of December 2007.

Shares of AT&T rose 31 cents to $37.88 in mid-day Friday trading on the news.

AT&T, which posted Q4 2007 EPS of 71 cents, in-line with the Reuters Q4 2007 consensus estimate, has made several acquisitions in recent years, including SBC Communications and BellSouth, as part of its business model revision for the digital age.




The digital age AT&T

Independent stock analyst C. Leonard Bauer, formerly of Prudential, told BloggingStocks Friday AT&T's wireless and broadband divisions are experiencing double-digit growth "and all signs indicate they will continue to be very impressive revenue streams," but the company's landline phone operations have hit both sector and technological headwinds.

"It's a combination of pinched margins and attrition," Bauer said. "AT&T has to decide if margins in this space will be sufficient for them to maintain a healthy capital investment in landline. Right now, whether landline margins will be sufficient for them remains an open question. The business is experiencing price pressure from competition, and it may require a revised investment strategy." Bauer added that he does not have a rating on nor own AT&T's shares.

Further Bauer says uncertainty over the T's landline strategy is one reason the company's stock has been seemingly stuck in a $30-$40 channel for the last two years, although it has traded in the low $40-range during that period.

"As soon as investors get a better idea how much AT&T's landline division will contribute to profits in 2009 and 2010, the sooner the stock will break out of this trading channel," he said.