The company is being hammered by the Federal Communications Commission for its failure to upgrade its own fiber optic networks, and has been fined for failing to adequately protect customers’ privacy and security.
T said Wednesday it will be filing for Chapter 11 bankruptcy protection, saying it would not be able to afford to pay its debt and creditors.
The company said it would reduce its workforce by nearly a third and reduce the size of its corporate headquarters.
It said the cuts will not affect its wireless business, which it is expected to sell.
AT &C’s net income will fall by as much as 50 per cent.
Its stock is down 40 per cent in the past year.
The merger with Time Warner Cable will help keep AT<akes internet provider in the $70 billion U.S. telecommunications market, but the deal will also add competition to cable television companies like Comcast, Charter and DirecTV.
The combined company is expected take on a lot of the same rivals, like AT&T’s DirecTv and Verizon’s U-verse, but it also will face competitors like Netflix and Amazon.
AT.&.;amp;MC said it is in discussions with more than 10 major cable companies to launch its own streaming video service, which will be similar to Hulu and other services.
The move comes as Netflix and other streaming services continue to grow, while AT&am is struggling to meet customers’ demand for video content.
ATs recent bankruptcy filing also came a week after Comcast agreed to pay $45 billion to settle antitrust allegations.