In his first day in the role as chairman and chief executive of AT&T, David Dorman took the opportunity to warn his staff that the long-distance operator faces tough times ahead. In his inaugural speech since replacing C. Michael Armstrong, Dorman noted that the company stood at a ‘critical juncture’. AT&T is today expected to post a loss of USD1.54 billion for the fourth quarter of 2002, compared with USD1.39 billion a year earlier. The incoming CEO is cutting a further 3,500 jobs, adding to the 10,000 redundancies made in 2000 and 2001. In an ominous move, he also warned his managers via email that salary rises may be put on hold and that he is reviewing the responsibilities of directors and officers.