The AT&T Restructuring of 1995

The AT&T Restructuring of 1995

Wednesday, September 20, 1995, AT&T Chairman and Chief Executive Officer Robert E. Allen announced plans for a strategic restructuring that would separate AT&T into three publicly traded global companies. Robert E. Allen said, "The company was taking this bold step to capitalize on the opportunities in each business' segment of the global information industry -- communications services, communications equipment, and transaction-intensive computing." Under the plan, a fourth business -- AT&T Capital Corporation -- would be sold, and AT&T shareowners would hold shares in each of the three remaining companies. "Changes in customer needs, technology and public policy are radically transforming our industry," said Robert E. Allen. "We now see this restructuring as the next logical turn in AT&T's journey since divestiture. It will make AT&T's businesses more valuable to our shareowners, even more responsively to their customers, and better able to focus on the growth opportunities in their individual markets."

A focus of one of the new companies will be to provide the best communications and information services worldwide. The services company, operating under the familiar "AT&T" brand name, would consist of AT&T's current Communications Services Group, the AT&T Universal card Services Corporation, the newly established AT&T Solutions consulting and systems-integration organization, and AT&T Wireless Services. The services company plans to create an AT&T Laboratories unit around the core of the Bell Laboratories. "AT&T's products and systems businesses, along with the world-renowned Bell Laboratories, would constitute a communications systems and technology company that would immediately be the global leader in its industry," said Robert E. Allen. The communications equipment company would include AT&T's Network Systems Group, Global Business Communications Systems, Consumer Products, AT&T Paradyne and Microelectronics. The new company named Lucent Technologies, would be a powerful competitor in the fast-growing communications systems market. Henry B. Schacht was designated Lucent Technologies Chief Executive Officer. The company's computer unit AT&T Global Information Solutions (GIS), would be established as an independent company by spinning it off to AT&T Shareowners. "Our services and systems businesses are at the intersection of tremendous change and opportunity," said Allen. "This restructuring ensures that each can follow the path of greatest opportunity without worrying about bumping into each other along the way." Lars Nyberg was announced Chief Executive Officer for NCR, formerly known as GIS, the new computer company.