American Telephone & Telegraph Co. has put a freeze on the hiring of new employees and might cut some staff jobs.

A spokesman for the telecommunications giant in New York said the steps were being taken in response to expenses that had grown to an "unacceptable level."On Wednesday, AT&T reported that second-quarter earnings were virtually unchanged from the year-ago quarter, despite a 4.3 percent gain in sales.

AT&T said the only exceptions to the freeze would be for college recruitment and some situations where the company needed "special skills."

The company has 315,000 employees. Although AT&T reduced its overhead by $1 billion last year, the hiring freeze and possible staff cuts indicate that expenses are still not under control.