AT&T & Verizon Got Billions From Government, Yet Laid Off 95,000 People In Just Five Years
from the do-not-pass-go,-do-not-collect-$200 dept
You'd be hard pressed to find a sector that has benefited more from the Trump era than telecom. In the last four years, telecom monopolies not only received billions in tax cuts (AT&T nabbed an estimated $42 billion in tax breaks alone), they convinced the Trump administration to effectively neuter the FCC's consumer protection authority, a move arguably worth countless billions more. In both instances these perks were doled out under the auspices that this would drive hiring and network investment. In reality, not only did that not happen, but the opposite happened.
Reports this week indicate that AT&T and Verizon alone have laid of 95,000 employees in just the last five years alone:
"After AT&T slashed headcount by more than 13,000 in the first nine months of 2020, the final tally was always going to be ugly. Results published this week show another 3,870 jobs disappeared in the fourth quarter. More than 50,000 have gone in just five years – about 18% of AT&T's headcount at the end of 2015.
Verizon has pruned with similar zeal. Only 1,000 jobs were cut from the total in the final three months of 2020, and just 2,800 over the entire year. But 45,500 have vanished since 2015, an alarming 26% of that year's count. The combined losses are roughly equal to the entire workforce at Vodafone, a UK-based operator with international operations.
Some losses were expected for these companies as the pivoted from aging landlines to wireless. At the same time, both companies promised that deregulation and tax breaks would immediately translate into thousands of new, high paying jobs, a promise that, by any metric, never materialized. Not only did both companies fire employees by the tens of thousands, giants like AT&T and Comcast reduced overall network investment. Killing net neutrality and the FCC's authority was supposed to create a boom in network investment. And despite former FCC boss Ajit Pai repeatedly pretending that was true, it simply wasn't.
AT&T's layoffs were driven largely by the company's insatiable appetite for mergers that don't make much sense. Said appetites saddled the company with an absolute mountain of debt. That debt was then paid for by the company's employees and customers. Meanwhile, executives like Randall Stephenson, responsible for bungling said mergers and related finances, are now happily retired and napping on giant beds of money.
Every, single time a US telecom monopoly wants something (merger approval, deregulation, subsidies, tax breaks) it promises the Earth, sea and sky. And every, single time, the company fails to deliver and nobody on any level is held accountable. Ever. Nobody, in either party of the U.S. government, has taken any serious steps to thwart this idiotic gravy train (especially those myopically and often performatively focused on "big tech"). Meanwhile, about 90% of the coverage from "he said, she said" media outlets excludes this grift rodeo as essential context.
AT&T receiving countless billions in tax cuts, subsidies, and regulatory FCC favors in exchange for absolutely nothing is the story. Yet any time AT&T's business model is covered, that's simply not mentioned at all by most large outlets. AT&T, tied to the NSA and therefore immune from government accountability, knows it doesn't even have to scrub its website of empty promises because executives know nobody, anywhere, is going to do anything about it.
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Filed Under: layoffs, subsidies, tax cuts
Companies: at&t, verizon
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Are there any highly-leveraged companies that are actually successful?
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Re:
Apple borrows huge amounts of money even though they have insane amounts of cash on hand.
Also Colgate I think?
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Re: Re: Apple I can see...
Apple is banking on innovation to keep them ahead of the pack and that requires investment. For example, supposedly subscriptions are now the big thing as a new business model for them, but with AppleTV+, their attempts at news, etc, they have a ways to go. If they want to make this work, they'll need to invest heavily in it.
But Colgate...? Are there huge new developments in toothpaste that require investment?
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Re: yep Netflix
Netflix has been famously (infamously?) in debt up to its eyeballs but just recently finally announced its cash flow is positive. This shouldn't have bothered investors because the reason they borrowed is that streaming is in its land-grab phase. Lock in subscribers now all over the world and most of them won't bother to cancel. Netflix's brand is now equivalent to streaming, it's the default service. That will pay dividends for decades.
This is a good example of "smart debt," where you have an actual plan to capitalize on that debt. As for AT&T, they have "dumb debt" (DirectTV - why buy any business in secular decline?) and "maybe okay debt" (Time Warner, assuming they can turn their HBO Max debacle around).
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Now look at how much the Telcos paid out in dividends in the same period.. Oh, that's where the money went!
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Can we go back to the Old
The old ways China and Japan RULED over the corps/companies??
Be stupid and dont do what you SAY you will do.
Be stupid as a politician, and NOT finish contracts you have demanded.
be stupid as the people Who HIRED the politicians, and didnt FIRE them for WASTING YOUR MONEY.
Off with their heads
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I'm still mystified as to how anyone can hear "merger" and not think "widespread layoffs". I've been through several, on both sides (retained and laid off), and there's always plenty. It's common sense - you're duplicating every function of your company, and doubling the customer base does not mean doubling your staff in any situation. Once you integrate systems and processes and so on, staff get cut because you see where the duplication is and you have to make the decision as to who stays.
I can understand being shocked at the level of layoffs, even though these are fairly predictable, but to think there won't be significant job losses after a merger is just ignorance.
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Capitalist.
Dictatorship.
Seriously, folks, that is what the US is.
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Does anyone remember sectors like the US steel industry? That's telecom, cable, and isps right now.
Only they aren't ever going to pack up and fuck off somewhere else.
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could it be as simple as ...
I'm sure there's some reason that it can't be handled this way, by why not require that the work be done prior to receiving a tax cut... seems like an 'easy' way to stop this non-sense...
I don't think "they don't have money to do X first" is a valid excuse... if it's already that strict of a budget, then it's not going to happen anyways.
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no one to blame but ourselves for
a) voting into Congress people who are all too willing to line their own pockets with 'campaign contributions' from these very same companies rather than aid the public who voted them into office
b) for voting the most powerful job on the Planet to the one person who did everything possible to throw as much tax payers money at the same companies and allow them to give absolutely fuck all in return!
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