Chairman and chief executive officer, AT&T Corporation
Born: 1954, in Georgia.
Education: Georgia Institute of Technology, BS, 1975.
Family: Married Susan (maiden name unknown); children: three.
Career: Sprint, 1981–1990, manager; 1990–1994, president of Sprint Business; Pacific Bell, 1994–1997, president, CEO, and chairman; SBC Communications, 1997, executive vice president; PointCast, 1997–1999, president, CEO, and chairman; Concert Communications, 1999–2000, CEO; AT&T Corporation, 2000–2002, president; 2002–, chairman and CEO.
Address: AT&T Corporation, 1 AT&T Way, Bedminster, New Jersey 07921-0752; http://www.att.com.
■ David W. Dorman had a relaxed style and spoke with a Georgian drawl; his keen wit and considerable charm put fellow workers at ease and enabled him to speak easily with the people he supervised. He gained a reputation for being able to build businesses when he increased Sprint Business's revenue from $4 million in 1990 to $4.5 billion in 1993. The greatest challenge of his career came in 2000, when he took on the task of rebuilding AT&T, a company whose total stock value had fallen from a high of $110 billion to a low of less than $11 billion in the late 1990s.
Dorman graduated with a bachelor's degree in industrial management from the Georgia Institute of Technology in 1975, just three years after entering college. His big break came in 1981, when he became the fifty-fifth employee hired by the company that would later become Sprint. He worked various management positions for the company until he was appointed as president of Sprint Business, where careful marketing led to rapid growth; the division eventually comprised 10,000 employees.
In 1994 Dorman was hired away by Pacific Bell, a division of Pacific Telesis Group, one of the Baby Bells spun off from AT&T in the early 1980s. At the age of 39 Dorman was the youngest leader ever at any of the Baby Bells, having become Pacific Bell's president, chief executive officer, and chairman of the board. The company was quite large, with 50,000 employees, 10 million household customers, one million business customers, and $11 billion in annual revenue.
In 1997 SBC Communications bought Pacific Telesis Group, and Dorman lost his exalted position, becoming SBC's executive vice president. Many observers thought that his move to PointCast in late 1997 was motivated by his frustration with having to answer to corporate leaders who did not share his management views, as well as by his desire to be the leader of a company. But Dorman stated that his wife and three children had not wished to move to SBC's corporate headquarters, demanding instead to stay put in California; his family's wishes motivated him to accept the position of president, CEO, and chairman of PointCast, an Internet information provider. Dorman received a $1.5 million signing bonus from PointCast and a $250,000 salary in 1998. He found PointCast to be confused, pushing too many different kinds of data; he gave the company focus by instituting an emphasis on news reporting. In spite of Dorman's efforts, however, PointCast ran short of capital in 1999, and in April of that year Dorman accepted the position of CEO at Concert Communications.
Concert Communications was a joint venture by AT&T and British Telecommunications. The companies' hope was to build Concert into a worldwide telecom service, but the project was doomed by unrealistic expectations from the management at both AT&T and British Telecommunications; in 2000 Concert failed. In December 2000 Dorman was named president of AT&T, becoming responsible for customer services, AT&T labs, network services, and global business ventures. AT&T had been without a president for over a year.
In 1998 AT&T's market capitalization was $110 billion, and the company was growing in new directions, having become the country's sixth-largest provider of Internet services. In 2000 AT&T carried more data traffic than voice traffic for the first time. On October 25, 2000, AT&T began reorganizing itself into four segments: AT&T Wireless, AT&T Broadband, AT&T Business, and AT&T Consumer. When Dorman became president, the company was chaotic, with communication between departments sorely deficient; in one instance, sales representatives were selling goods that the divisions responsible for production did not have.
Dorman spent much of 2001 fostering cooperation among those departments. He devoted his time to clarifying the motivation behind the changes AT&T was undergoing, such as the May 25, 2001, purchase of NorthPoint Communications, a network service provider, as well as the spinning off of AT&T Wireless to become an independent company. The revenue from Dorman's responsibilities totaled $40 billion, out of $66 billion altogether for AT&T; in all Dorman supervised over 82,000 employees.
In February 2002 Dorman was appointed to AT&T's board of directors, a step toward his becoming the company's CEO. During 2002 Dorman strove to modernize AT&T by replacing 48 "legacy" telecommunications switching systems with up-to-date systems that used Internet protocol. He hoped to use the Internet for routing voice telephone calls as well as data communications, thus eliminating the need to pay local telephone companies access fees in order to use their lines. Additionally Dorman directed the marketing of bundled services to customers, which proved especially attractive to businesses that wanted a wide variety of services and could find them all available at AT&T. The company sold these bundles of services to corporations such as Hyatt Hotels, MasterCard, and Merrill Lynch. AT&T introduced ultra-accurate voice-recognition software that would replace operators at some companies. Dorman spent $200 million to develop new customer services, and he had all 4,300 customer-services personnel retrained to be more helpful. On November 18, 2002, AT&T Broadband merged with Comcast Corporation, and the AT&T CEO and chairman C. Michael Armstrong left AT&T to run the new Comcast; that day Dorman became CEO and chairman at AT&T. For the year Dorman was paid $6.5 million.
In 2003 AT&T became the largest provider of Internet services and doubled its total number of local-service customers to 28 million. Another 52 "legacy" systems were replaced. The company introduced software called "underware" to handle basic computer tasks, and Dorman puckishly suggested that customers should not leave home without their underware. He negotiated a merger with BellSouth that would have put him in a position to become CEO when BellSouth's leader F. Duane Ackerman retired; however, the merger talks fell apart on October 28, 2003, when Ackerman decided the $25 apiece price for AT&T shares was too steep. That year Dorman cut 8,500 jobs, or 12 percent of AT&T's workforce.
In 2004 some observers still expected AT&T to fail, but its situation was looking up. Dorman had carefully paid down AT&T's debts, giving the company a good debt-to-income ratio. Furthermore, the company's stock was once again increasing in value, giving AT&T $15 billion in stock capitalization.
See also entry on AT&T Corp. in International Directory of Company Histories .
Backover, Andrew, "Laid-Back AT&T Chief Looks for '90 Percent Substance,'" USA Today , December 24, 2003, http://www.usatoday.com .
Rosenbush, Steve, "New Honcho, New AT&T? David Dorman's Big Plans May Not Save the Phone Giant," BusinessWeek , May 20, 2002, pp. 130–131.
Woolley, Scott, "'I'm Just Dave,'" Forbes , May 26, 2003, p. 76.
—Kirk H. Beetz