AT&T, the San Antonio, Texas-based phone company, is going through some executive changes and making some cuts in its big VP corps, sources tell me. Cutting costs at this level shows that Ma Bell’s C-Suite is worried about today’s economic realities.

First the juicy bit: Ma Bell is offering packages to VP-level executives in the hopes that they’ll leave. If they don’t want to leave, they will be demoted, my sources tell me. Now that’s a carrot-and-a-stick approach if there ever was one!

At the higher echelons, there have been some moves as well. AT&T recently hired former VeriSign executive John Donavon to be CTO, overseeing network upgrades and research, a move that got less prominence than the destined-to-fail and quite dumb idea, the 3D Pogo browser. Andrew Stern, who used to be the CEO and chairman of USi, a company recently acquired by AT&T, has left, another bit of news that AT&T didn’t share with those who follow the company. Chris Rice is apparently taking over for him.