AT&T Corp. will cut another 7,400 jobs and reduce the value of its assets by $11.4 billion, spurred by its retreat from traditional consumer telephone services, the company said on Thursday.

The company said the new job cuts, which raises its total cuts to 20 percent of its work force this year, and other cost measures would boost operating profits in the second half of the year.

The moves are part of efforts by the third-largest U.S. telephone company to shift its focus to business services and cut costs amid a price war for long-distance telephone services and increasing competition from the dominant U.S. local telephone companies.

"We expect to see some real effect of the headcount and other reductions on the profit of the business in the second half of this year," AT&T Chief Financial Officer Thomas Horton told Reuters. "This has been hard work, but it is bearing fruit on the cost structure of the company."