AT&T is proceeding with a three-year, $6 billion cost-cutting effort that includes asset sales and layoffs
AT&T has confirmed that it will lay off around 4,700 employees and close 250 retail stores permanently.
The Communications Workers of American union said that it was informed by AT&T that the carrier plans to cut 3,400 technician and clerical jobs across the country over the next few weeks. AT&T also told the union that it plans to permanently close more than 250 AT&T Mobility and Cricket Wireless stores, which will impact 1,300 retail jobs.
“If we are in a war to keep our economy going during this crisis, why is AT&T dismissing the troops?” said Communications Workers of America President Chris Shelton, citing comments made by AT&T Chairman and CEO Randall Stephenson during an interview on CNN last month that referred to the COVID-19 crisis as a “war”. “CWA and AT&T have been working together to protect worker and customer health and safety and to provide premium pay for essential workers. The company showed an interest in investing in its workers and its network by cancelling planned stock buybacks. AT&T could help lead the country toward recovery by partnering with its workforce to build next generation networks. Instead the company is adding to the pain of the recession already underway.”
“These actions align with our focus on growth areas along with lower customer demand for some legacy products and the economic impact and changed customer behaviors resulting from the COVID-19 pandemic,” an AT&T spokesperson said in a statement to RCR Wireless News. “As a result, there will be targeted, but sizable reductions in our workforce across executives, managers and union-represented employees, consistent with our previously announced transformation initiative. Additionally, we’ll be eliminating more non-payroll workers — the vast majority of which are outside the United States — than we are managers or union-represented employees. Reducing our workforce is a difficult decision that we don’t take lightly. For employees who are leaving as part of these changes, we’re offering severance pay and company-provided healthcare coverage for up to six months for eligible employees.”
AT&T executives have been publicly discussing a three-year cost-cutting effort. On AT&T’s first quarter call, AT&T COO John Stankey — who will take over as CEO from Randall Stephenson on July 1 — talked about the economic impacts of COVID-19 on the company and how it is responding.
“We’re not backing off our cost and efficiency transformation initiatives that remain largely under our control,” Stankey said at the time. “If anything, we see this as an opportunity to approach all our businesses differently and better align our work with how COVID has reshaped customer behaviors and the economy.” Stankey went on to say that AT&T is “working on 10 broad areas of opportunity that we expect will deliver $6 billion in cost savings over the next three years and improve market effectiveness, everything from IT and field operations to call centers and retail distribution.”
He highlighted two during the call: AT&T’s retail and third-party distribution capabilities and its field operations, both of which are involved in the newly announced cuts. Stankey said that AT&T would be “adjusting locations, location size, own versus agency mix and point-of-sale support systems and compensation structures.” Meanwhile, he said, AT&T’s field operations “will benefit from our product evolution to customer self-install, the shift of our broadband base to lower-cost fiber and improved systems and AI capabilities that will reduce truck rolls and eliminate second visits.
“These efficiencies will enhance our ability to continue to invest in our key growth initiatives,” Stankey said. He then went on to discuss 5G and HBO Max, which launched last month.
AT&T also expects to close about $2 billion in asset sales this year, including the sale of existing real estate and towers, and the closing of transactions to sell its Puerto Rico wireless operations and Central European Media Enterprises, an Eastern European media company which it acquired as part of Time Warner.