Lockhart out as chief of AT&T's consumer unit

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The president of AT&T's consumer division is on his way out, according to executives close to the company. The departure of H. Eugene Lockhart would come just over a year after he joined the telecommunications giant.

AT&T Chairman C. Michael Armstrong has called a meeting of the consumer group for Monday and is expected to announce Mr. Lockhart's departure.

Mr. Lockhart, 50, joined AT&T in January 1999 as chief marketing officer; he took the top consumer post six months later, after Dan Schulman left to become president-chief operating officer at Priceline.com.

AT&T also may be losing Stephen Graham, who oversees the company's ad budget as VP-marketing communications worldwide. An executive close to the company said it would not be a surprise if Mr. Graham, 44, left. But his departure, the executive added, would likely be voluntary since Mr. Graham has been courted extensively by other companies.

Mr. Graham has pushed to move AT&T's marketing strategy forward and may be persuaded to stay if AT&T gives him a stronger role, possibly as an empowered chief marketing officer. The chief marketing officer position has been empty since Mr. Lockhart moved up last year.

Mr. Graham has overseen a run of successful ad programs, including those for AT&T Digital One Rate and 1-800-CALL-ATT, as well as consumer campaigns starring Paul Reiser.

Mr. Lockhart is one of more than 100 executives expected to leave as part of Mr. Armstrong's latest housecleaning, an effort to cut expenses by $2 billion. Mr. Armstrong has said publicly that he expects about one in four of AT&T's top 500-plus executives to leave the company. He specifically excluded wireless and broadband groups from the shakeup.

Speculation has been rampant inside AT&T about who will go and who will stay. Mr. Lockhart did not return calls for comment last week. An AT&T spokesman declined comment, as did Mr. Graham.

Mr. Lockhart's record at AT&T has been unremarkable, with no significant marketing and consumer moves on his watch.

Last fall's introduction of all-day, 7 cents-per-minute pricing was seen as a response to 5 cent weeknights and weekend pricing by Sprint Corp. and MCI WorldCom (now proposed merger partners). And one executive who requested anonymity said Mr. Lockhart "rubbed a lot of people the wrong way."

Prior to joining AT&T, Mr. Lockhart was president of BankAmerica Corp.'s global retail bank; he also served as CEO of MasterCard International from 1994 to 1997.

Mr. Lockhart's departure is not expected to lead to any changes in AT&T's agency lineup. The company's agencies include Y&R Advertising and FCB Worldwide, both New York.

Copyright February 2000, Crain Communications Inc.

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