Arstechnica - May 14, 2019
AT&T has cut more than 23,000 jobs since receiving a big tax cut at the end of 2017, despite lobbying heavily for the tax cut by claiming that it would create thousands of jobs.
AT&T in November 2017 pushed for the corporate tax cut by promising to invest an additional $1 billion in 2018, with CEO Randall Stephenson saying that "every billion dollars AT&T invests is 7,000 hard-hat jobs. These are not entry-level jobs. These are 7,000 jobs of people putting fiber in ground, hard-hat jobs that make $70,000 to $80,000 per year."
The corporate tax cut was subsequently passed by Congress and signed into law by President Trump on December 22, 2017. The tax cut reportedly gave AT&T an extra $3 billion in cash in 2018.
But AT&T cut capital spending and kept laying people off after the tax cut. A union analysis of AT&T's publicly available financial statements "shows the telecom company eliminated 23,328 jobs since the Tax Cut and Jobs Act passed in late 2017, including nearly 6,000 in the first quarter of 2019," the Communications Workers of America (CWA) said yesterday.
AT&T's total employment was 254,000 as of December 31, 2017 and rose to 262,290 by March 31, 2019. But AT&T's overall workforce increased only because of its acquisition of Time Warner Inc. and two smaller companies, which together added 31,618 employees during 2018, according to an AT&T proxy statement cited in the CWA report.
Excluding employees gained via mergers, AT&T's workforce dropped from 254,000 to 230,672, a cut of 23,328 jobs, the CWA report points out. These numbers are for AT&T's global workforce, but the vast majority of its employees are in the US. AT&T reported having 44,892 non-US employees as of October 1, 2018.
The most recent layoffs affected 368 union technicians in California, the CWA said last week.
AT&T also cut more than 10,000 jobs each year in 2016 and 2017. AT&T had 281,450 employees as of December 31, 2015, 268,540 as of December 31, 2016, and 254,000 by the end of 2017.
AT&T slashed capital spending, too
"AT&T's annual report also shows the company boosted executive pay and suggests that after refunds, it paid no cash income taxes in 2018 and slashed capital investments by $1.4 billion," the CWA wrote.
AT&T reported $21.6 billion in capital expenses in 2017 and $21.3 billion in 2018, a cut of $300 million. CWA told Ars that the cut is $1.4 billion when "excluding federal government reimbursements for the construction of FirstNet," AT&T's government-funded public safety network.
AT&T capital spending is already down more than $900 million this year, as the telco reported Q1 2019 capital expenditures of $5.18 billion, down from $6.12 billion in Q2 2018.
"What AT&T is doing to hardworking people across America is disgraceful," CWA President Chris Shelton said in the union announcement. "Congress needs to investigate AT&T to find out how it is using its tax windfall since the company's own publicly available data already raise serious alarm bells. AT&T got its tax cut. Where are the jobs?"
AT&T's actual capital spending of $21.3 billion in 2018 is far short of what AT&T told investors to expect at the beginning of 2018, when it said that full-year capital spending would "approach" $25 billion and be "$23 billion net of expected FirstNet reimbursements."
AT&T cuts jobs in “declining” business units
When contacted by Ars, AT&T didn't deny any of the CWA's findings about job cuts. "We continue to hire in areas where we're seeing increasing demand for products and services, but technology is changing rapidly, and that affects hiring and employment," AT&T told Ars. "There are fewer jobs in parts of the business that are declining and facing technology shifts."
AT&T also said that it "recently opened new 500-seat call centers in Chicago; Houston; Sunrise, Fla.; and Mesa, Ariz. and that "[m]ost of the jobs at these call centers will be filled by union-represented employees."
AT&T said it takes several steps to keep existing employees despite lowering its overall workforce. AT&T said:
We work very hard to keep employees through these transitions: through normal attrition when possible, follow-the-work offers (frequently with a relocation allowance), internal job-matching programs, and voluntary severance offers.
Many union-represented employees have a job offer guarantee that ensures they are offered another job with the company if their current job is eliminated.
When we wrote about AT&T layoffs in January this year, AT&T told Ars that "we hired more than 20,000 new employees last year and more than 17,000 the year before." But the company's financial statements make it clear that new hirings fell far short of job cuts.
"While AT&T responds to criticism of its massive job cuts with boasts about hiring, hiring to address turnover is not the same as job creation," the CWA said yesterday.