AT&T is getting slammed for making changes that lower its costs of doing business in wireless.
The Communications Workers of America (CWA) union took note of AT&T’s report last week that showed “robust first quarter earnings,” with net profit up 60% year over year. But the company continues to cut jobs and reduce retail operations, which does not sit well with the union.
AT&T has closed 549 corporate retail stores over the past year, and even though it has converted many stores into dealer stores, that shrinking corporate retail footprint results in lower wages for wireless retail workers, according to CWA.
The union acknowledged that many retail workers represented by CWA were able to transfer into a virtual sales job because of a negotiated job guarantee under their union contract. However, it remains concerned about what the changes are doing to decent-paying jobs.
Both AT&T and Verizon have been cutting their workforces as they transition to virtualized networks that require less human interaction. In recent years, AT&T was under pressure by activist investor Elliott Management to cut costs, including at the wireless retail level. Operating corporate stores is more costly than using authorized retail associates or dealers, and AT&T ended up transitioning away from the old corporate store model.
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According to CWA, AT&T reduced it total employment by 16,020 in the full year encompassing the pandemic, which is slightly less than the previous year’s reduction of 17,800.
“While fewer union-represented jobs were cut during the pandemic, CWA is very concerned that AT&T chose to continue eliminating thousands of jobs during a global health and economic emergency to satisfy Wall Street demands for profits at any cost,” the union said in a press release.
According to CWA, AT&T’s relationship with its CWA-represented workforce continues to deteriorate. “For much of its history AT&T respected the rights of its employees to choose to join a union and engage in collective bargaining,” the union said. However, AT&T recently established “a pattern of anti-union behavior, forcing CWA to take the company to court again and again.”
Asked to respond, AT&T pointed out that it's the largest unionized wireless carrier in the U.S.
“As part of our previously announced multi-year transformation strategy, we have made reductions to our workforce, mostly from voluntary early retirement offers and attrition,” AT&T said in a statement provided to Fierce. “Our represented employees who were affected by store closures during the pandemic were offered other positions with-in the company. Even with these changes to meet the needs of our customers, we remain one of the largest union-represented employers in the country, and the largest unionized wireless carrier. “
CWA’s complaints come amid Wall Street analyst reports that question AT&T’s investment in wireless, saying it’s not enough. At the same time, they recognize that AT&T needs to invest in wireless, fiber and HBO Max at a time when the operator is trying to reduce debt and has limited cash. One analyst firm suggested AT&T could be headed for a similar situation as Sprint, which didn’t make the network investments it needed and tried to compete on aggressive promotions.