AT&T has tossed a big chunk of coal in its employees’ stockings: Christmas layoffs totalling 12,000 — about four per cent of its worldwide workforce.

The staff reductions will actaully start this month and continue through next year, costing the telecommunications giant an estimated (US)$600 million in severence compensation payments.

AT&T also announced plans this week to reduce capital expenditures next year from this year’s level — another move to address the effects of the worsening economy.

In contrast to the layoffs, AT&T has announced it will continue hiring for its wireless, video and broadband operations in response to still-increasing customer demand for those services.