Telecom Sector Sees Major Layoffs Despite Historic Stretch Of Tax Breaks, Regulatory Favors

Failures

from the government-pampered-monopoly dept

The Trump era was very, very good to the country’s giant telecom monopolies. Trump officials doled out billions in tax breaks (AT&T nabbed $42 billion alone) and billions more in poorly tracked subsidies. It also approved anticompetitive mergers without even reading the details, and handed out all manner of regulator favors like the dismantling of net neutrality or the elimination of media consolidation rules.

In absolutely every instance telecoms like AT&T and Comcast claimed these efforts would boost broadband deployment and create untold thousands of jobs.

I’m sure you’ll be shocked to learn that none of that ever happened.

Verizon, so far this year, has eliminated 6,000 jobs. AT&T just revealed it laid off another 10,000 jobs (on top of the 50,000 it laid off in the wake of its epic Time Warner and DirecTV merger disasters). All while Verizon CEO Hans Vestberg and AT&T CEO John Stankey hoovered up massive executive compensation. Despite being shockingly terrible at their, you know, jobs:

“Stankey and Vestberg have been such depressing mediocrities in the management job, as reflected in the dwindling share prices of their firms. AT&T’s has dropped from $22.34 when Stankey became CEO in July 2020 to $14.32 today. Verizon’s is down from $57.09 in August 2018, the date of Vestberg’s elevation, to $33.44.”

As it currently stands, Stankey’s $22.9 million in 2022 compensation is 219 times more than the median AT&T employee salary. That’s despite the fact that Stankey oversaw the company’s disastrous attempt to pivot to becoming a streaming video giant via a series of doomed mergers that set giant piles of money on fire.

Vestberg’s $19.8 million in 2022 compensation was 130 times more than the average employee. That’s despite the fact that Verizon’s 5G hype wound up being absolute gibberish, and the company has continued to bleed wireless and TV subscribers as it loses its network performance edge.

These failures occurred even while the government mindlessly coddled both companies to a near-historic degree. As noted recently, thanks to the Trump era and the industry smear campaign against the Gigi Sohn nomination, U.S. telecom giants enjoyed seven straight years where U.S. regulatory oversight at the FCC was the government policy equivalent of a damp fart.

Executives and some shareholders made out like bandits, employees and consumers got higher prices, worse product, layoffs, and chaos. And in policy circles, there’s zero indication anyone learned anything from the experience or has any real interest in pushing for notable reform. In small part because telecom policy–despite the importance of affordable access–is considered passé in the era of “big tech,” but also because there’s simply zero financial, market, or regulatory incentive for anyone in the chain of dysfunction to ever change.

Filed Under: antitrust, antitrust reform, broadband, high speed internet, layoffs, monopolies, regulatory capture, telecom