AT&T ADS, AGENCIES DODGE AX THAT CUT 40,000 JOBS

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AT&T's elimination of 40,000 jobs in the next two years will for the most part leave much unscathed marketing and advertising posts at the core company.

Also, the ax isn't expected to swing as far as ad spending or AT&T's agency roster as the company focuses on long-distance, cellular and credit-card calling services.

Still, another change announced last week could affect AT&T's ad strategy.

EXECUTIVE SHUFFLE

George Burnett, VP-communications services for consumer and small business markets, was given responsibility for corporate advertising, brand management and consumer advertising. Mr. Burnett reports to Joseph Nacchio, president of AT&T Consumer Communications Services.

Dick Martin, who had been VP-public relations and director of advertising, moves over to focus on AT&T's entry into advanced services like new media and wireless services.

"The vast majority of personnel moves in marketing/advertising will be at our new equipment and computer companies," an AT&T spokesman said, referring to job cuts announced last week.

The two new companies are to be spun off within the first quarter. Both are currently conducting reviews and are expected to announce new corporate names and agencies by the end of the month.

As far as ad spending, Mr. Burnett expects it to remain about the same as last year, when Advertising Age estimated expenditures at more than $1 billion.

He also said AT&T plans to continue working with its core agencies: Young & Rubicam, FCB/Leber Katz Partners, McCann-Erickson Worldwide and N.W. Ayer & Partners, all New York; and Bronner Slosberg Humphrey, Boston.

Most industry analysts agree that AT&T won't be downsizing when it comes to marketing.

"AT&T's downsizing won't have a substantial effect on advertising," a Y&R executive said.

MORE PRESSURE ON AGENCIES

Added Brian Adamik, VP-consumer communications at the Yankee Group, a Boston consultancy, "AT&T's role in the advertising world will become even bigger as it attempts to offer bundled services like Internet access, cable, local [calling] and cellular services. AT&T will be putting more pressure on its agencies to have greater accountability as they enter new markets."

With telecommunications on the threshold of a major legislative overhaul that will deregulate the industry, insiders believe AT&T especially will need to streamline its marketing.

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