AT&T has announced 12,000 job cuts, or 4% of its workforce, in an effort to significantly reduce costs.
The Texas-based telecommunications company cited economic pressures, a changing business environment and the need for a more efficient organisational structure.
AT&T said the cuts would start in December and would continue throughout 2009.
It also forecast a reduction in capital expenditures next year.
In a statement, AT&T added that, despite the cuts, it would continue to create jobs in other parts of the business, such as wireless, video and broadband.
AT&T said it had earmarked $US600 million in the fourth quarter of 2008 to make redundancy payments to employees affected.
The company provides telephone services and internet access to more than 70 million customers in the United States.
In 2006, it acquired BellSouth in a $US67 billion takeover.