January 12, 2019, 12:52 AM
oldbill123Improvement is on the way
AT&T is preparing for yet another
significant round of layoffs according to internal documents
obtained by Motherboard. The staff reductions come despite
billions in tax breaks and regulatory favors AT&T
promised would dramatically boost both investment and job
creation.
A source at AT&T who asked to remain anonymous because
they were not authorized to speak publicly told Motherboard
that company leadership is planning what it’s calling a
“geographic rationalization” and employment
“surplus” reduction that will consolidate some aspects
of AT&T operations in 10 major operational hubs in New
York, California, Texas, New Jersey, Washington State,
Colorado, Georgia, Illinois, Missouri, and Washington, DC. A
spokesperson for AT&T confirmed to Motherboard that it
is planning to “adjust” its workforce.
While AT&T has yet to come up with a final, formal
internal tally for this new round of looming layoffs,
AT&T employees worry the staff reductions could prove to
be significant, especially outside of these core areas.
Managers are being briefed on the plans now, though AT&T
isn’t expected to formally announce the specifics until
they’re finalized later this month.
The staff reductions were first announced in an internal
memo sent to managers last Friday by Jeff McElfresh,
President, Technology & Operations at
AT&T.“To win in this new world, we must continue
to lower costs and keep getting faster, leaner, and more
agile,” McElfresh told employees. “This includes
reductions in our organization, and others across the
company, which will begin later this month and take place
over several months.”The ongoing consolidation isn’t surprising
for a company that’s attempting to pivot from
curmudgeonly-old phone company to sexy new media brand via
its acquisition
of Time Warner. AT&T’s desperate to shed old DSL
customers it doesn’t
want to upgrade, and instead want to utilize
those resources for its pivot into streaming video over
wireless.
This news comes in the wake of AT&T receiving a $20
billion windfall last quarter courtesy of the Trump
administration tax breaks. That’s in addition to the
friendlier environment AT&T finds itself in as a result
of the Trump administration’s assault on consumer
protections ranging from net
neutrality to broadband
privacy guidelines.
In a memo of talking points advising managers on how to
address employee concerns obtained by Motherboard, AT&T
attempts to explain away the disconnect between the
company’s words and its actions.
“What we’ve said was that AT&T planned to invest an
additional $1 billion in the United States this year as a
result of tax reform, and that research shows that every $1
billion in capital invested in the telecom industry creates
about 7,000 good-paying jobs for American workers, across
the broader economy,” the memo
states.AdvertisementBut wireless sector investment actually declined
last year, with most of the savings from regulatory
favors and tax breaks going instead toward stock buybacks,
executive compensation, or to pay off the mammoth
debt accumulated by a series of AT&T megamergers
many consumers and employees didn’t want in the first
place, critics charge.When contacted for comment, AT&T confirmed
that the company was planning another round of staff
reductions, but insisted that any layoffs would only impact
a very small portion of the company’s overall
workforce.“We are hiring to meet the needs of the
growth areas of our business,” the company told
Motherboard. “In fact, we hired more than 20,000 new
employees last year and more than 17,000 the year before. In
cases where we do have to adjust our workforce, we take
steps to lessen the effect on
employees.”But outside analysis and union officials
contest these numbers. AT&T’s offshoring efforts have resulted
in 44
closed call centers and 16,000 lost US jobs since 2011.
And despite AT&T CEO Randall Stephen promising 7,000
high-paying jobs thanks to the Trump tax cuts, a new
report released this week by the Communications Workers
of America claims 10,700 US-based union jobs have been
eliminated in the last year alone.
Thanks to a reduction of future AT&T tax liabilities in
the Tax Cuts and Jobs Act, AT&T saw profits of $29.5
billion in 2017, up from $13 billion in 2016. The
permanently-lower tax rate should net AT&T an additional
$3 billion annually in perpetuity, the CWA report states.
Similar windfalls have been enjoyed by Verizon, which has
also responded
not with raises or hiring, but staff reductions.
AT&T initially insisted it had doled out $1,000 bonuses
to 200,000 employees as a direct result of the Trump tax
cuts. It was later
revealed that these bonuses had already been negotiated
as part of unrelated union negotiations. Even then, the $200
million expenditure from the bonuses amounted to just 7
percent of AT&T’s expected annual benefit from the
cuts, the report found.
Advertisement"Despite its strong financial position and
promises to invest in its American workforce, AT&T has
shifted much of its employment away from good,
family-supporting jobs and towards a low-wage model that
undermines the quality of its customer service and its
standing as a good corporate citizen," the CWA said in
this week’s report.
Granted none of this is really new. Both AT&T and
Verizon were
widely criticized back in 2014 when it was similarly
found that telecom tax breaks didn’t result in increased
investment or job creation. AT&T’s promises of
“synergies” in the wake of its $85 billion acquisition
of Time Warner have proven to be similarly
hollow. And the industry’s false claims regarding the
benefits of killing net neutrality are well
documented. Someday, younger generations may want to
seriously reconsider America’s historical obsession with
blindly throwing tax breaks, subsidies, and deregulatory
favors at companies in exchange for benefits that seem to
never actually materialize. Until then, we seem intent on
repeating the same mistakes, having learned little to
nothing from experience. ·