AT&T’s “headcount rationalization”—i.e. job cuts—hits thousands more workers

AT&T is cutting 3,400 union jobs from its wireline broadband and phone network operations as well as closing 250 wireless retail stores, according to a union that represents AT&T employees. Wireline job cuts are initially “voluntary” through buyouts, but AT&T will proceed to layoffs if not enough workers volunteer.

The total number of planned job cuts is apparently more than double that, because AT&T told Ars that it is cutting even more non-union jobs than union jobs. The cuts are a continuation of what AT&T has called a multi-year “headcount-rationalization” project.

“AT&T has informed the Communications Workers of America (CWA) of its plans to cut over 3,400 technician and clerical jobs across the country over the next few weeks,” the union said in a press release yesterday. “In addition, the company plans to permanently shutter over 250 AT&T Mobility and Cricket Wireless stores, impacting 1,300 retail jobs.”

CWA Communications Director Beth Allen told Ars that “the vast majority of the 3,400 positions are technicians” for the wireline network. While the CWA doesn’t yet have a complete list of job cuts from every location, Allen estimates that “fewer than 100 are clerical or direct customer service (for instance, billing representatives).” This would mean that AT&T is eliminating more than 3,000 workers who maintain and upgrade the copper and fiber networks that deliver phone and broadband service in 21 states.

“AT&T is offering a voluntary buyout for many of the jobs on the wireline side. If they don’t get enough volunteers in the locations where they are looking to cut, the company will move to involuntary cuts,” Allen told Ars. “We are continuing to work to reduce the job loss, and our collective bargaining agreements provide for severance and relocation offers for many members.”

AT&T also plans to “permanently shutter over 250 AT&T Mobility and Cricket Wireless stores, impacting 1,300 retail jobs,” the union announcement said. Allen told Ars that “it’s not yet clear how many of the workers impacted by the store closings will be able to find another assignment and how many will be going off payroll.”

AT&T hasn’t revealed total number of job cuts

Allen told Ars that “all of the cuts we know about—the 3,400 wireline and the folks at the retail stores—are CWA-represented.” But this is apparently less than half the total job cuts, as AT&T told Ars today that “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.”

AT&T has not revealed the total number of job cuts for either union or non-union workers.

“We think AT&T should disclose more information about its non-payroll, contracted-out workforce,” Allen said. “These would include call-center vendors, both domestic and overseas, authorized retailers, and contract techs and construction workers. There’s absolutely no way to verify their claims about reducing that workforce if they don’t regularly report on it.”

Pandemic accelerated “headcount rationalization”

AT&T said that retail-store closures “reflect our customers’ shopping practices. While these plans are not new, they have been accelerated by the COVID-19 pandemic.”

But wireline broadband networks like AT&T’s have proven to be a crucial part of the pandemic economy, and AT&T was planning big job cuts even before the coronavirus pandemic forced millions of Americans to stay home and use more home-Internet data. On March 3, AT&T President and COO John Stankey told investors about a three-year cost-cutting plan to generate billions in savings. Stankey said there would be 10 cost-cutting initiatives, including “headcount rationalization,” or what the rest of us call job cuts or layoffs. (Stankey is scheduled to become AT&T CEO on July 1 when Randall Stephenson retires.)

The “headcount rationalization” is a continuation of layoffs from previous years. AT&T reduced its employee count from 268,220 to 247,800 in 2019 alone, despite promising to use a corporate tax cut to create thousands of new jobs. AT&T cut another 3,310 jobs in Q1 2020. In all, AT&T has cut 41,128 jobs since the end of 2017, according to the CWA press release. These numbers do not include contractors.

Despite AT&T cutting thousands of jobs both before and during the pandemic, Allen said that “AT&T executives have made it clear through their public statements that, shamefully, they are using the COVID-19 pandemic as an excuse to accelerate their already devastating job cuts.”

The Dallas Morning News quoted AT&T Communications division CEO Jeff McElfresh telling investors yesterday that the “pandemic gave AT&T a ‘head start’ on its cost-cutting plan.”

“Legacy” copper network affected

AT&T’s statement to Ars said the cuts “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.”

The reference to “legacy products” refers at least in part to AT&T’s copper network, which in many areas is incapable of providing modern broadband speeds and has been poorly maintained. Of course, large portions of AT&T’s wireline network wouldn’t be described as “legacy” if AT&T upgraded those areas to fiber. But with AT&T having mostly stopped its fiber-to-the-home deployment, the company in October announced it was planning a $3 billion cut in capital investments in 2020.

In Q1 2020, AT&T’s company-wide revenue was $42.8 billion, down from $44.8 billion in last year’s first quarter. Company-wide operating income was $7.5 billion, up from $7.2 billion year over year.

Severance packages

AT&T said it “worked with union leadership on an enhanced offer for wireline technicians that includes significant voluntary severance incentives up to nearly $100,000, and virtually all reductions involving wireline technicians are voluntary at this time. Affected retail employees will receive an offer of another position with the company, mostly jobs they can do working from home.”

“Reducing our workforce is a difficult decision that we don’t take lightly,” AT&T also said. “For employees who are leaving as part of these changes, we’re offering severance pay and company-provided healthcare coverage for up to 6 months for eligible employees.”

The CWA isn’t satisfied and, in its press release, took aim at one of Stephenson’s recent statements on the company’s response to the pandemic:

Last month, AT&T CEO Randall Stephenson described the COVID-19 crisis as “a time of war,” during an interview on CNN. Stephenson went on to say, “Everybody needs to step up and do their part, in terms of how we help the general population and the general public.”

“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. “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 canceling 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.”