425 under the Securities Act of 1933 and deemed filed
          pursuant to Rule 14a-12 under the Securities Exchange Act of
                                      1934
                           Subject Company: AT&T Corp.
                          Commission File No. 001-01105



Planned  distribution to all AT&T Corp.  U.S.-based  employees on Thursday,  May
23,2002

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                       Proposed Reverse Stock Split Impact
                             On AT&T Employee Plans



On Tuesday,  May 14, 2002,  AT&T filed a proxy  statement,  seeking  shareholder
approval for the AT&T  Broadband - Comcast  merger,  with the U.S.  Securities &
Exchange  Commission.  Included  in the  proxy  statement  is an AT&T  Board  of
Directors' proposal to effect a one-for-five  reverse stock split of AT&T common
stock at the discretion of the Board.

This  action is tied to a major  restructuring  program  for one of the  largest
companies in the United  States.  We believe that an  adjustment to AT&T's stock
price and shares  outstanding  makes sense given the  significant  restructuring
that has taken  place  within the  company.  With  shareholder  approval  of the
reverse  stock split,  AT&T would have about one billion  shares  outstanding  -
about  the same  number  as five  years  ago,  prior  to the  shares  issued  in
connection with the cable acquisitions.

AT&T has undertaken several significant initiatives,  including the split-off of
AT&T  Wireless and the proposed  merger of AT&T  Broadband and Comcast to create
AT&T  Comcast.   The  value  received  by  shareholders  through  these  various
distributions  has the effect of  reducing  the stock  price (but not the actual
shares  outstanding)  of AT&T Common  Stock.  The intention of the reverse stock
split is to bring the price of AT&T more in line with other companies within the
Dow Index and S&P 500 as well as other New York Stock Exchange companies.

It is important  to note:  there is no change to the  ownership  interest of the
holdings or to the dividends paid to investors as a direct result of the reverse
split.  A good  analogy:  if a person  goes to the bank to withdraw  $100,  does
he/she ask for twenty $5 bills,  or five $20 bills?  Either way, the total value
is the same.

The reverse  stock  split  would work as follows:  each holder of five shares of
AT&T common stock ("Old AT&T Common Stock") would become the holder of one share
of AT&T common stock ("New AT&T Common Stock").  The total value immediately and
before the split would remain approximately the same. However, after the reverse
split, each individual share would now represent approximately five shares prior
to the split. For any fractional shares that result from the reverse stock split
action, shareholders would receive cash.

If shareowners  approve this proposal,  all shares of AT&T common stock would be
included in this reverse split.  This includes  shares held in the AT&T employee
plans such as AT&T Savings Plans, the AT&T Employee Stock Purchase Plan, and the
AT&T Long Term Incentive  Program.  The total value immediately before and after
the split of what an employee holds in each plan would remain  approximately the
same.  Regarding  the AT&T  Long Term  Incentive  Program,  the grant  prices of
outstanding stock options also will be adjusted at the time of the reverse stock
split action.

As more information becomes available, we will provide updates in ESAP.