AT&T wants to cut debt to $150 billion
AT&T (T) is cutting jobs in its WarnerMedia subsidiary in apparent cost-cutting measures as the company works to reduce its debt load. Last month, AT&T eliminated more than 150 jobs at WarnerMedia television businesses CNN and TruTv, Variety reported.
AT&T’s debt ballooned to $180 billion following big-ticket acquisitions that included the $85.4 billion purchase of WarnerMedia in a transaction that closed last year. AT&T used borrowed funds to pay for the WarnerMedia acquisition. At the end of the first quarter, AT&T’s debt stood at $169 billion. The company is aiming to reduce its debt to $150 billion by the end of the year. T-Mobile (TMUS) carries $26.5 billion of debt.
AT&T selling some assets to raise funds for debt repayment
Cutting jobs can help AT&T shrink its wage bill and make financial savings that it could apply toward reducing its debt load. But cutting workers is just one way AT&T is trying to control its debt. The company has also been selling its non-core assets to raise funds toward its debt reduction goal. Last month, AT&T announced that it sold its 10% stake in Hulu for $1.4 billion. Hulu is one of Netflix’s (NFLX) fiercest competitors in the online subscription video business. Hulu exited the first quarter with 26.8 million subscribers in the United States compared to Netflix’s 60.2 million subscribers. AT&T owned a piece of Hulu following its purchase of WarnerMedia. The exit of AT&T left Walt Disney (DIS) and Comcast (CMCSA) as Hulu’s owners with stakes of more than 60% and 30%, respectively.