AT&T Downsizing Offers Lessons to Corporate America, Says E&Y Kenneth Leventhal

Business Wire, Jan 3, 1996

SAN FRANCISCO--(BUSINESS WIRE)--Jan. 3, 1996--AT&T's downsizing today has serious implications that go beyond 78,000 people losing their jobs.

Downsizing by Corporate America ripples down at many other levels within the organization and within the community, according to Ed Lubieneicki, senior manager with E&Y Kenneth Leventhal Real Estate Group who recently completed a significant assignment for a Baby Bell that consolidated space from several locations into a single major facility. That particular plan converted general space into offices, put the graphics department in the Vice President's old mahogany office, moved executives to cubicles and started an office hoteling operation on the huge campus. The real estate solutions that were implemented allowed the company to reduce its space needs by 30% and save over $500 million over the next five years -- a move which saved jobs.

According to Lubieneicki: -0-

--One large downsizing can completely throw the local office market into a tail spin by opening up a large amount of office space.

--The only constant being change in today's business environment, flexibility of space and a readiness to change direction must be a key component of any business plan. If you're not organized to allow for change at a moment's notice, opportunities will get by you (or you may find yourself in a downsizing mode.)

--Downsizing also negatively impacts a community's local housing and retail markets by creating an uncertain consumer base. The only segment that seems to benefit directly from downsizing is the rental housing industry which sees a good deal of would-be home owners playing it safe, he said.

CONTACT: Gallen Associates

Molly Davis, 510/268-9848