AT&T this week said it is laying off 7,400 more people than planned this year as it retreats from consumer telephony.

The beleaguered carrier is also writing off over $11 billion in assets as it continues to transform its network to support next-generation data optimized applications.

AT&T will incur an asset impairment charge of $11.4 billion and a workforce restructuring charge of $1.1 billion for the third quarter.

The layoffs are in addition to the 4,900 cuts AT&T announced earlier this year. In all, 12,300 employees will be shown the door this year, or about 20% of the carrier's workforce.

AT&T announced plans earlier this year to exit consumer telephony after recent court rulings indicated that prices for access to local RBOC facilities were likely to climb. A Washington, D.C., appeals court in March had ordered an end to portions of the FCC's unbundled network elements platform policy which established government-mandated rates for wholesaling RBOC local loops.

A string of efforts by competitive local exchange carriers, including AT&T, MCI and Sprint, to overturn the ruling were have been blocked prompting AT&T to exit the consumer local access business.

"In response to recent regulatory developments and a highly competitive market, we have made some tough decisions to reduce our workforce and cut costs," AT&T Chairman and CEO Dave Dorman said in a statement. 

Speculation that AT&T would announce a significant restructuring this week surfaced earlier this week when Dorman abruptly canceled a speaking engagement at a Goldman Sachs conference Wednesday in New York.

Observers believe AT&T is trimming itself down to attract suitors. RBOCs could gain access to a wealth of nationwide enterprise data customers and assets by acquiring AT&T, MCI or Sprint.

The RBOCs have all said they are looking to grow their base of enterprise customers. But at that Goldman Sachs conference this week, SBC and BellSouth indicated they were not interested in acquiring an IXC at the moment -- they are still engineering Cingular's $41 billion acquisition of AT&T Wireless -- and Verizon has its hands full with a possible divestiture of 10 million rural access lines to help fund its FTTP fiber buildout and EV-DO wireless expansion.

AT&T's exit from consumer telecom is a bittersweet milestone in the carrier's 130 year history. AT&T was the parent of the Bell System monopoly, earning the nickname "Ma Bell."