AT&T plans to cut 3,400 technician and clerical jobs in the coming weeks, according to the Communications Workers of America (CWA).
In addition, the carrier intends to permanently shutter more than 250 AT&T Mobility and Cricket Wireless stores. Fierce Wireless reported earlier this week on an unspecified number of AT&T and Cricket store closures.
In regards to the layoffs, AT&T in a statement emailed to Fierce Wireless said: “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. 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.”
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AT&T has been pursuing a $6 billion cost-cutting initiative, which COO John Stankey in early March, before the pandemic ramped up, said included near-term targets of headcount rationalization and benefit restructuring.
On AT&T’s first-quarter earnings call in April, Stankey, who is taking the helm as CEO July 1, said two initiatives underway were expected to yield over $1 billion in recurring cost improvement. Those included changes to retail and third-party distribution to align with reshaped consumer behavior, as well as adjustments to field operations including more self-installs.
In its release, CWA suggested that AT&T is moving work away from employees who are union members to less expensive contractors who don’t have the same training and experience.
In its statement today, AT&T said the carrier is eliminating more non-payroll workers, largely located outside of the U.S., than it is mangers or union-represented employees. According to a CWA spokesperson, the cuts are broad but concentrated in the Midwest.
“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 6 months for eligible employees,” continued AT&T.
AT&T also said it worked with union leadership on an offer specifically for wireline technicians, which includes "significant voluntary severance incentives" up to nearly $100,000 and virtually all employee reductions involving wireline technicians are currently voluntary.
Like other carriers and retailers across the country, AT&T temporarily shuttered some retail stores amid the pandemic, but not all will reopen.
In terms of the store closures, an AT&T spokesperson reiterated reasons regarding changing customer behaviors and the global public health crisis.
“With more customers shopping online, we are closing some retail stores to reflect our customers’ shopping practices. While these plans are not new, they have been accelerated by the COVID-19 pandemic,” the AT&T spokesperson stated.
CWA said store closures would impact 1,300 employees, but AT&T stressed that most workers will be offered another position within the company.
“Of those, only those who don’t qualify, volunteer to leave or decline a job offer will leave the company and will receive severance pay,” according to AT&T.
A CWA spokesperson noted that under terms of its collective bargaining agreements, employees will be offered work at different locations if available and said the union "is still discussing the implications of these store closures with AT&T."
The CWA union has been vocal about AT&T slashing jobs and its opposition to pressure from hedge fund Elliot Management, which purchased a stake in the carrier in 2019. In late March, AT&T decided to cancel a planned accelerated stock buyback agreement worth $4 billion, a move CWA commended.
Still, in its press release, CWA President Chris Shelton referenced a comment by AT&T CEO Randall Stephenson describing the COVID crisis as “a time of war.”
“If we are in a war to keep our economy going during this crisis, why is AT&T dismissing the troops?” Shelton said in the statement. “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.”
The union called out Stephenson, claiming he pledged to create 7,000 new jobs if President Trump’s corporate tax cuts were passed and cited more than 41,000 job cuts made by AT&T since the Tax Cut and Jobs Act went into effect in 2018. According to AT&T, the carrier had said it planned to invest $1 billion in the U.S. as a result of benefits from the tax reform, which it did, and at the time cited research showing for every $1 billion in capital invested in the telecom industry it creates roughly 7,000 well-paying jobs in the broader U.S. economy.
Updated with information about wireline technicians, comments from CWA, and correction to language to clarify AT&T's plans as a result of tax reform.