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.

Filed Under: layoffs, subsidies, tax cuts
Companies: at&t, verizon

AT&T Has Now Eliminated 41,000 Jobs Since Its $42 Billion Trump Tax Cut

from the a-bad-deal-that-keeps-getting-worse dept

AT&T informed its union employees last week that the company would soon begin yet another round of layoffs, after repeatedly promising that industry deregulation and its $42 billion tax cut would result in job growth and a major network investment boom. According to the Communications Workers of America, AT&T says it's laying off 3,400 technician and clerical jobs across the country over the next few weeks. They're also shutting down over 250 AT&T Mobility and Cricket Wireless stores, which will eliminate another 1,300 retail jobs.

While many will imply these layoffs are due to COVID-19, they're simply part of a longstanding workforce reduction effort at AT&T. According to the union, AT&T has now eliminated 41,000 positions since receiving a $42 billion Trump tax cut. The CWA conveniently provided a chart, drawn from AT&T earnings reports and filings, that show what AT&T's been up to:

The problem: AT&T's CEO Randall Stephenson went on live television in 2017 and insisted that the Trump tax cut would result in "thousands of high paying 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...“I cannot overstate how important I think a tax bill that makes the US corporate taxes a competitive regime around the world — that’s big. That’s significant."

That, of course, never happened. And analysis of the Trump tax cut has made it clear that other than making a lot of rich folks notably richer, the cuts accomplished jack shit. Not only did the package not pay for itself, the economic boost it provided was short lived and negligible. And, one has to think, the money thrown at the nation's biggest corporations would certainly have come in handy during a raging pandemic with 45 million unemployed Americans and an endless parade of struggling startups and small businesses.

Granted that was just one of AT&T's many promises. AT&T also repeatedly claimed that the FCC's decision to neuter its authority over telecom (of which the net neutrality was only a small part) would result in unprecedented job growth and network investment. Again, the exact opposite happened, just like the last dozen times AT&T lobbyists have played this game in DC (BellSouth merger, net neutrality repeal, FCC broadband privacy rule repeal, fiber deployment subsidies).

Every, single time AT&T 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 fucking nothing is the story. Yet that's simply not mentioned at all by most large outlets, despite the fact that AT&T's bullshit promises haven't even been scrubbed from the company's website yet.

While COVID-19 will likely provide cover, AT&T's real motivation lies elsewhere. The company spent so much money on megamergers (DirecTV in 2015, Time Warner in 2018) it's drowning in debt. And while these acquisitions were supposed to help the company dominate the streaming video and mobile video ad sectors, the company's actually been losing video subscribers hand over fist. In part due to rate hikes imposed on consumers to recoup said debt. It's an ouroboros of dysfunction caused by high-level executives, but as usual consumers and workers get to pay the real bill.

Filed Under: donald trump, jobs, layoffs, subsidies, tax cuts
Companies: at&t

AT&T Preps For Even More Cuts After $42 Billion+ In Trump Tax Cuts And Regulatory Favors

from the ill-communication dept

It seems like only yesterday that AT&T CEO Randall Stephenson was promising on live television that if Trump followed through on his tax cuts, the company would dramatically boost investment and add thousands of new jobs. Not "entry-level jobs," mind you, but "7,000 jobs of people putting fiber in the ground, hard-hat jobs that make $70,000 to $80,000 per year." Each $1 billion in new investment spurred by government favors, AT&T insisted, would result in 7,000 new jobs. "Lower taxes drives more investment, drives more hiring, drives greater wages," Stephenson said.

The same rhetoric was a common occurrence as AT&T lobbied to have net neutrality (and FCC oversight in general) stripped away, insisting this would result in significant job creation and a massive surge in investment. The amount of money AT&T saved from turning the FCC into a glorified rubber stamp for industry is likely incalculable. The tax cuts were more easily calculated, with CBS suggesting the cuts should net AT&T around $42 billion.

Here on planet Earth the exact opposite of what AT&T promised occurred: the company actually decreased its 2020 CAPEX by some $3 billion, and unions say the company has cut more than 37,000 jobs since the Trump tax cuts took effect.

This week, AT&T announced it would be conducting another $6 billion in cuts that will include additional "headcount rationalization," which in human language likely indicates even more layoffs:

"The effort may include layoffs. Stankey didn't specifically mention that word, but instead said the operator would enact a "headcount rationalization," a term that could include layoffs as well as reductions by not hiring replacements for workers who retire or leave. That program, he said, would reduce the operator's labor expenses by 4%, or roughly $1.5 billion, by the end of 2020. He added that the reduction would target employees in AT&T's call centers, management structures and distribution strategy. AT&T employed roughly 252,000 people at the end of September."

It's odd that when news outlets discuss AT&T's cost-cutting and layoff strategies, they fail to mention we just got done throwing tens of billions in regulatory favors and tax cuts at the company in exchange for absolutely nothing. In fact, we apparently paid AT&T to do the exact opposite of what it repeatedly promised to do. It's particularly galling given that most of AT&T's current problems stem directly from spending too much money on harmful megamergers and bumbling its entry into the online streaming video space.

But as usual, the end result isn't AT&T executives paying any sort of penalty for incompetence, it's the company's workers and customers who have to pay for the mistakes -- in more ways than one. And it's all being subsidized by American taxpayers who, thanks to a general press unwillingness to call a duck a duck, often don't understand the scope of the grift directly underfoot.

Filed Under: competition, jobs, layoffs, monopolies, subsidies, tax cuts
Companies: at&t

AT&T Keeps On Firing Employees Despite Claims The Trump Tax Cut Would Boost Job Growth

from the not-the-droids-you're-looking-for dept

It seems like only yesterday that AT&T CEO Randall Stephenson was promising on live TV that if Trump followed through on his tax cuts, the company would dramatically boost investment, in the process creating thousands of new jobs. Not "entry-level jobs," mind you, but at least "7,000 jobs of people putting fiber in the ground, hard-hat jobs that make $70,000 to $80,000 per year." Each $1 billion in new investment, AT&T insisted, would result in 7,000 such jobs. "Lower taxes drives more investment, drives more hiring, drives greater wages," Stephenson said.

We've pointed out several times how these promises meant absolutely nothing, but AT&T itself keeps driving the point home.

AT&T's earnings released last week showed that the company has eliminated 37,818 jobs since the Tax Cuts and Jobs Act (TCJA) (which dropped AT&T's overall tax rate to 21% providing the company an estimated $46 billion in savings) was cheerily passed by Congress just three or so years ago:

"The Communications Workers of America, the telecom sector’s biggest union, says AT&T’s promised jobs never arrived either. Union officials today complained that AT&T earnings show the company has laid off 37,818 employees worldwide since the tax cut was passed in 2018, with 4,040 pink slips sent out to employees worldwide in the fourth quarter of 2019 alone."

Again that promised network investment never occurred either. AT&T's fourth quarter CAPEX was the lowest in a decade, and this year AT&T's expected to trim its overall investment somewhere in the neighborhood of $3 billion. The money? It went into executive pockets, investor pockets, and the company's massive debt load created by mindless merger mania.

We've noted a few times that making outlandish promises, grabbing billions in government favors (merger approval, tax breaks, regulatory help, whatever), then delivering jack shit is something AT&T and other telecom giants have been doing for the better part of a generation without no penalty whatsoever. None.

The same promises were made by AT&T and its primary lobbying arm (US Telecom) ahead of the net neutrality repeal. There too, AT&T promised job growth and massive new investment into broadband networks in exchange for the FCC basically self immolating its consumer protection authority. But when it came time to collect on said promises, as usual, they were nowhere to be found. The same head fake bait and switch also occurred ahead of AT&T's merger with Time Warner, which was also supposed to deliver investment, competition, and "synergies" that AT&T's earnings report shows never actually arrived.

Despite the evidence here being indisputable, somehow we never learn our lesson, and AT&T never faces any meaningful penalty. Worse, the folks that often pride themselves on standing up to government spending (like grumbling about some small town deciding to build its own broadband network) are routinely nowhere to be found when it comes time to discuss what's arguably one of the biggest, long running cons in American history.

Filed Under: donald trump, jobs, tax cuts
Companies: at&t

AT&T Said Trump Tax Cuts Would Create Thousands Of Jobs. Instead, AT&T's Laying Off Thousands.

from the head-fake dept

It seems like only yesterday that AT&T CEO Randall Stephenson was promising on live television that if Trump followed through on his tax cuts, the company would dramatically boost investment, in the process creating thousands of new jobs. Not "entry-level jobs," mind you, but "7,000 jobs of people putting fiber in the ground, hard-hat jobs that make $70,000 to $80,000 per year." Each $1 billion in new investment, AT&T insisted, would result in 7,000 new jobs. "Lower taxes drives more investment, drives more hiring, drives greater wages," Stephenson said.

Yeah, about that.

Here on planet Earth, AT&T has revealed that the company's slated CAPEX for 2020 will actually be decreasing by about $3 billion next year. The company is also preparing to engage in a new round of significant job cuts as it fights off an ongoing investor revolt triggered by the company's bumbling obsession with merger mania, and a continued exodus of video subscribers caused by relentless price hikes and branding incompetence.

It's unclear how many employees will lose their jobs and/or benefits with this latest round of cuts (one of several in just the last few years), but the scale isn't expected to be subtle:

"Everything is on the table," AT&T COO John Stankey said Tuesday at the UBS Global TMT Conference in New York. "It's a target-rich environment."

AT&T's cost-reduction program initially will include a 4% cut in the operator's labor expenses -- representing roughly $1.5 billion of the operator's finances -- next year. During an investor event last week, AT&T CFO John Stephens explained that the initiative would target employees, contractors, benefits "and so forth."

That is, if you're playing along at home, the precise opposite of what Stephenson promised.

The Trump tax cut resulted in AT&T getting billions in immediate tax relief, and roughly $3 billion in tax savings annually, in perpetuity. Yet when it came time for AT&T to re-invest this money back into its network and employees as promised, the company actually did the opposite and began laying them off in droves. Unions claim AT&T has laid off an estimated 23,000 workers worldwide since the Trump tax plan, with investors and executives unsurprisingly pocketing the savings. Anything even vaguely resembling accountability for these false promises has been utterly nonexistent.

The dip in overall CAPEX is also the exact opposite of what AT&T claimed when it lobbied for the elimination of net neutrality. You'll recall AT&T executives and lobbyists repeatedly claimed that the FCC's net neutrality rules stifled sector investment, a claim indisputably disproven by an endless number of studies and reports. Even telecom CEOs themselves are on record clearly stating this investment apocalypse never actually occurred. Granted, it's worth noting AT&T has received countless billions in other regulatory favors thanks to a rubber stamp FCC; efforts just as unlikely to result in new jobs or network investment.

Again, nobody anywhere has actually held AT&T accountable for these falsehoods. Nor is there any indication, on absolutely any front, that anybody intends to. And in the post-truth era, the folks who supported throwing billions at AT&T for doing nothing still somehow suggest the decision worked wonders, despite a convoy of evidence and data making it abundantly clear that's not true. All told, you can be fairly sure we'll learn absolutely nothing from this experience, and before long AT&T will line up, hand outstretched, quite accurately expecting Uncle Sam to repeat the process all over again.

After all, the company has been engaged in some variation of the same tap dance for the better part of the last few decades with only fleeting efforts to do anything about it.

Filed Under: donald trump, jobs, layoffs, randall stephenson, tax cuts
Companies: at&t

AT&T Promises A Cornucopia Of Broadband Investment...But Only If Trump Gives It A Giant Tax Cut & A Shiny New Merger

from the Charlie-Brown-and-the-football dept

For decades now, AT&T has promised that an incredible boon in broadband investment is waiting just around the corner -- but only if AT&T gets what it wants from the government. Whether it's gunning for tax cuts and subsidies, or looking for approval of its latest megamerger, AT&T's an absolute master of the regulatory carrot and a stick game. Even if the carrot is entirely hallucinated, as we saw when AT&T threatened to curtail already minimal fiber optic deployment unless net neutrality was killed.

Of course because AT&T doesn't face meaningful competition in most markets, and few members of either party of government are truly interested in doing much of anything about this problem, this investment explosion never really materializes one way or the other. That's why millions upon millions of AT&T customers still pay an arm and a leg for last-generation DSL speeds, AT&T's consistently under fire for failing to upgrade many cities, and most of the company's network can't offer speeds remotely close to the gigabit-speeds now being offered by cable.

Yet somehow, each and every time AT&T comes stumbling toward government with its hand outstretched, we oddly and mysteriously ignore this history lesson and provide AT&T with absolutely every benefit of the doubt. Case in point: with AT&T looking for Trump administration approval of its $85 billion Time Warner deal, the company last week trotted out its latest promise: a massive wave of broadband investment if the company sees some major tax cuts and has its latest merger approved; a narrative the press was happy to reiterate without qualification:

Ahead of the tech meeting, Stephenson told "Squawk Box" the company will increase its capital investments if Trump delivers on tax reform by the end of the year.

"I don't think we're unique. I think you would see this happen across all industries, and with every player in our industry," he said.

You'll recall that Trump originally threatened to block AT&T's planned acquisition of Time Warner on the campaign trail, claiming it was "too much concentration of power in the hands of too few." But Trump has since given every indication that he intends to approve the deal, and his recently hired antitrust boss at the DOJ is on record saying he thinks the deal should be approved.

Consumer advocates worry an even larger AT&T will use its expanded broadcaster power to hamstring licensing access to streaming competitors. They're also concerned AT&T will use usage caps, overage fees and "zero rating" to give its own content an unfair advantage. But because there's about 100 AT&T lobbyists at any one moment lobbying DC lawmakers to approve the deal, most analysts now think it should sail through with modest, if any, conditions.

It will be just the latest victory for a company that has recently convinced government to kill consumer broadband privacy protections, dismantle net neutrality, end an effort to bring competition to the cable box, and is now pushing government to further hamstring regulatory oversight of one of the least competitive markets in America. Last week, AT&T CEO Randall Stephenson and Trump spent much of a full day lavishing praise upon one another, including this bit of heady telecom sector analysis from Donald:

"With Stephenson seated to his right, Trump said AT&T was "like two companies" — "you started, then it was made different by government and now here you are again." The president added that such a reinvention over the years was "not easy to do."

Of course AT&T didn't "re-invent" itself as-so-much as it got blown up by government for being a predatory monopoly, after which it slowly but surely re-assembled itself via a wave of brand acquisitions (SBC, Ameritech, Bellsouth and ultimately the AT&T brand itself). It then lobbied state and federal governments to not only ignore the lack of competition in the broadband market, but to pass laws protecting it from competition. So yes, while that's impressive in and of itself, the end result has been a company with an indisputably vicious history of anti-consumer policies, anti-competitive behavior and outright fraud.

And while AT&T has been caught repeatedly lying about the job and broadband investment benefits of blind deregulation and M&As, that never gets factored in to assessing the credibility of whatever AT&T's pushing today. And it's clearly not going to be a problem for a Trump administration that has already been taking credit for telecom sector jobs it had absolutely nothing to do with. AT&T's merger pitches are always rife with bullshit and bravado on the job creation and broadband expansion front, but with Trump's help, you can expect AT&T to take things to an entirely new level once the deal is formally approved later this year.

Filed Under: broadband, competition, doj, donald trump, fcc, investment, mergers, tax cuts
Companies: at&t