AT&T computer unit to cut costs, stop making PCs

September 20, 1995 -- DAYTON, Ohio -- In a decisive action to create a
smaller, swifter and more focused business, AT&T's computer unit today
announced a major cost-cutting initiative that will eliminate
approximately 8,500 jobs, including 1,000 positions from the unit's Dayton
headquarters and those of 1,300 independent contractors who perform
services for the unit. Most of these positions will be eliminated by the
end of 1995.

AT&T Global Information Solutions (GIS), as the unit is known, currently
employs approximately 43,000 people in more than 120 countries

This action is part of a strategic restructuring AT&T announced today that
will separate AT&T into three publicly traded, global companies
capitalizing on the opportunities in each business' segment of the global
information industry -- communications services, communications equipment
and transaction-intensive computing, which is the business of AT&T GIS.
GIS will be spun off to AT&T share owners.

Because of the cost-cutting initiative by GIS, AT&T will incur a pre-tax
charge expected to be approximately $1.5 billion. AT&T said this charge,
which will be taken against third-quarter earnings, would reduce 1995
after-tax earnings by an estimated $1.0 billion or 66 cents per share. The
charge will cover expenses related to separation pay and other related
costs, closing of facilities, asset write-downs and other items. Excluding
the charge, AT&T said it continues to target earnings-per-share growth of
at least 10 percent in 1995.

"The realities of declining margins and cost-cutting across the computer
industry require us to take this step now, painful and difficult as it is"
said Lars Nyberg, chairman and CEO of AT&T GIS, who assumed the post in
June following a 20-year career at Philips Electronics NV. "We must
dramatically reduce our costs to be competitive, and as a first step to
becoming profitable."

AT&T GIS will continue to offer customers personal computers as part of
total solutions, but will no longer develop and manufacture its
Globalyst&#153; line of personal computers nor sell them through retail
outlets. The unit expects to announce a relationship with a new PC
supplier soon.

"Lars Nyberg is the right leader to get our computer business back on
track," said AT&T Chairman Robert E. Allen. "His goal is to be world-class
in a few targeted industry segments and in delivering high-quality
computer platforms and services. I believe that's not only worth doing,
but doable. GIS's customers and employees can count on AT&T's complete
support during this transition."

"AT&T GIS will continue to be a business computer and services company,"
Nyberg said. "Our growth rates in general-purpose servers, in systems
designed for the retail and financial industries, and in professional
services, are above industry averages.

"We intend to support our current customers. We will also pursue
opportunities in our rapidly growing world-wide services business with
customers in all industries."

As announced in July, AT&T GIS will build on its strengths in three key
industries -- financial, retail and communications. "We can sustain
successful performance only by knowing intimately what is happening in
these industries and developing customer solutions that deliver a real
competitive advantage -- for example, our automated teller machines, where
AT&T GIS is the world leader," Nyberg said.

In addition to these three industries, AT&T GIS will also focus on
enterprise computers, worldwide services and Systemedia, which
manufactures and markets paper-receipt rolls, business forms, ink ribbons,
labels and other items for customers in many industries.

The financial industry business will be headquartered in London, while the
retail industry business will be based in Atlanta. The other four
businesses will be headquartered in Dayton, but will have facilities
around the world.

While AT&T GIS will no longer develop industry-specific solutions for
customers in consumer goods manufacturing, transportation and government
markets, it will continue to be a business computer and services company
in these three areas and will support and service current hardware and
software installations. The unit will continue to have a strong commercial
relationship with Bell Laboratories.

Most departing AT&T GIS associates will leave the payroll by the end of
this year, consistent with local, state, federal, and other countries'
laws. They will receive an array of benefits, including separation pay,
continuation of health and life insurance for six months, career
counselling, and outplacement services. The unit is working aggressively
to place these associates in new jobs, either in other AT&T units or
outside the company.

AT&T acquired AT&T GIS (then called NCR) in 1991 for $7.48 billion in
stock. The unit had 1994 revenues of $8.46 billion and operating income of
$2 million.
 
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