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AT&T's Planning Yet More Layoffs Despite Tens Of Billions In Tax Breaks And Government Favors

Failures

from the Charlie-Brown-and-Lucy-football dept

Thu, Jan 10th 2019 06:22am -

Telecom monopolies have a pretty good racket going. They’ll consistently demand all manner of tax cuts, subsidies, and other government perks in exchange for A: jobs that never actually materialize, or B: broadband network expansions that somehow never actually arrive. The nation’s telcos in particular have received countless billions in taxpayer subsidies to expand their broadband networks, yet time and time again we’ve shown how they’ve wiggled out of these obligations, leaving huge swaths of America left outside of the reach of fast, inexpensive, competitive broadband (that’s particularly true in poor urban and rural areas).

Yet somehow, we here in America never quite learn the lesson. Case in point: you might recall that in late 2017 AT&T CEO Randall Stephenson told anybody who’d listen that the Trump era tax cuts (which granted AT&T a $20 billion one-time windfall and $3 billion in extra cash every year thereafter) would create upwards of 7,000 new high-paying jobs paying $70-$80k. The CEO also tried to claim that as a direct result of the tax cuts it would be doling out $1000 bonuses to roughly 200,000 employees.

Funny story, but those promised jobs never arrived. AT&T did technically add some jobs, but they were of the dirt cheap, off-shored labor variety. In reality, union data suggests the company cut 10,700 US jobs in the year since Stephenson made his statement. This was on the heels of the 44 call centers and 16,000 jobs AT&T had already cut since 2011. And those bonuses? While employees did receive them, it was later revealed they had already been arranged as part of union negotiations, and had nothing to do with the Trump tax cuts. Even then, they accounted for about 7% of just one year of AT&T’s new tax benefits.

Fast forward to this week, when insiders at AT&T informed me that the company is planning yet another round of significant layoffs at the company as it attempts to pivot from grumpy old telco to sexy new Millennial advertising company:

“A source at AT&T who asked to remain anonymous because they were not authorized to speak publicly told Motherboard that company leadership is planning what it?s calling a ?geographic rationalization? and employment ?surplus? reduction that will consolidate some aspects of AT&T operations in 10 major operational hubs in New York, California, Texas, New Jersey, Washington State, Colorado, Georgia, Illinois, Missouri, and Washington, DC. A spokesperson for AT&T confirmed to Motherboard that it is planning to ?adjust? its workforce.”

AT&T downplayed the scope of the layoffs in my conversations with the company, but employees tell me they believe that as AT&T consolidates its network workforce in these key cities, a significant number of employees will lose their jobs if they’re outside of this footprint and unwilling or unable to relocate. While AT&T informed me the layoffs would only impact a “very small” number of employees, we should be able to fact check that claim in a few weeks or months when the cuts are made official.

On one hand, you can understand that a company flush with antiquated copper landlines might need to streamline its roster as it refocuses on streaming video over wireless. On the other hand, this is not the future AT&T promised in the wake of not only receiving tens-of-millions in tax breaks, but the incalculable billions it stands to make courtesy of the attack on net neutrality and FCC authority. The moves closely mirror similar ones made by Verizon, which responded to the huge cash influx not with hiring or raises, but with a massive, 10,000 employee workforce reduction.

About five years ago even the Wall Street Journal was forced to concede that throwing tax cuts at giant telecom monopolies never actually nets the job and investment promises the companies and their well-lobbied lawmaker pals claim they will. Everybody knows these kinds of perks go right into executive and investor pockets, yet every few years we engage in this adorable little stage play where we pretend these kinds of telecom subsidies, tax breaks, and deregulatory favors actually aid the common good, despite the fact history repeatedly shows us that’s never been, nor will ever be, actually true.

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Companies: at&t

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Comments on “AT&T's Planning Yet More Layoffs Despite Tens Of Billions In Tax Breaks And Government Favors”

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64 Comments
Greevar (profile) says:

I think the simple reason this happens repeatedly is because they are only accountable to shareholders who don’t care about anything other than a favorable quarterly report. These companies need to be held accountable to the stakeholders at large if they want to receive anything from the government. It only stands to reason that they should be obligated to adhere to conditions attached to every handout they get and face serious consequences when they fail to follow through on their end. Otherwise, they behave like spoiled children that get no punishment when they drop their pants and shit on the living-room rug.

'Dirt-napper says:

Re: Hello, "Greevar"! Back after 30 month dirt nap!

And as characteristic of Techdirt’s zombies, not a hint of two and a half year absence, let alone explanation.

That’s because it’s inexplicable EXCEPT as astro-turfing.

How many of the comments here are real? How long has this been going on? It certainly explains the uniformity of opinion.

PaulT (profile) says:

Re: Re: Re: Re:

Yet again, I have to note – in best case scenario according to his arguments, he’s correct and he’s just spent the last couple of years arguing with bots on a site nobody else visits. By his own criteria, the idea that he’s knowingly spent week after week howling into the void is the best outcome he can hope for.

Even if he “wins”, he utterly fails.

'Dirt-nappers says:

Re: Re: Re: Hello, "Greevar"! Back after 30 month dirt

It’s simple. I got bored with morons like you. I took a break.

First, thanks for calling me merely boring and a "moron"! It’s a lot better than usual.

Second, how did you identify me as "moron" unless you’ve been reading lately? And if so, how did you miss all mention of zombies and not know you’d look like one?

Anyhoo, A) I’m still here, but B) wasn’t in 2016 when you quit commenting. So you’d no reason to leave, and no reason to have returned. Just another puzzle…

You don’t actually explain, just attack.

I felt a desire to comment on this because I hate corporations that shit on the public.

Now this is substantive. Or is IF you include Google and Facebook in corporations. — But Masnick is a blatant corporatist always defending surveillance capitalism, and says that corporations are "persons" having "First Amendment Right" to control the speech of "natural" persons on "platforms" (says that power is in CDA Section 230) , which obviously leads directly to you and me having no place to protest corporate power. So if you’re not lying, then you necessarily disagree with Masnick. Or, more likely, you’ll exempt Masnick’s favored Google / Facebook as "good" corporations, which would point you up as actually just another corporatist and fanboy. I predict that you’ll soon ardently support Techdirt, just like all the other zombies (there are dozens, IF anyone is new here).

James Burkhardt (profile) says:

Re: Re: Re:2 Hello, "Greevar"! Back after 30 month

1) you can read without posting, even read the comments. I post relatively rarely compared to the most prolific commentators, but when I do I get insightful pretty regularly, because the content matters, not how often I post.

2) Your arguements express a lack of understanding and nuance, which makes it impossible to debate you directly. “You dont conform to my view that google should be burned to the ground unless it hosts my child pornography collection, so you can’t protest AT&T screwing over its employees” fails at every level of logic.

PaulT (profile) says:

Re: Re: Re:2 Hello, "Greevar"! Back after 30 month

“Second, how did you identify me as “moron” unless you’ve been reading lately?”

Why would he need to log in to read?

“And if so, how did you miss all mention of zombies and not know you’d look like one?”

He probably ignored you because every time you whine impotently about zombies your posts are hidden from intelligent readers. Also, the only person he’d look like that to is you, and I presume he doesn’t care what you think.

“Anyhoo, A) I’m still here, but B) wasn’t in 2016 when you quit commenting. So you’d no reason to leave, and no reason to have returned. Just another puzzle…”

Try reading properly and note that he said “morons like you” and not specifically you. We sadly have more than one raging idiot to deal with here.

“says that power is in CDA Section 230”

STILL you have no idea what that section says or what is said about it here…

Anonymous Coward says:

Re: Re: Re: Re:

Was looking for insight into a serious societal problem,
got silly assumptions and juvenile retorts.

Not surprised at all that you do not care about anything but yourself.

There are many people protesting in the streets but you do not others to know about it? btw … I do not watch nor read the Conservative News Network.

Coyne Tibbets (profile) says:

Trickle down

This is kind of like the final repudiation of “trickle-down theory,” proof that nothing trickles down.

“You give me $10, I give you back $1,” has never worked. The sick part is no one would fall for this in a face-to-face game. But greedy assholes managed to convince a generation of politicians that it would work.

Yet more proof that politicians are all idiots. If you needed any more proof.

'Dirt-nappers says:

Re: Re: Trickle down -- Another 'Dirt-napper! 6 comments a year.

56 total in nine and a half years!

"drkkgt" like "Greevar" up there is just ODD for an "account. Only ONE comment in 2018. So here’s another inexplicable except as astro-turfing on same page.

Anyone new should keep in mind that this is while Techdirt is visibly declining in number of pieces and interest, besides all of its piratey notions firmly over-turned in court.

Yet "accounts" keep resurrecting to be blandly supportive and never against Masnick’s blatant corporatism.

So how many commenters here were/are real?

Anonymous Coward says:

Re: Re: Re: Trickle down -- Another 'Dirt-napper! 6 comments a y

Haven’t you figured out yet that nobody likes you, almost nobody even bothers to read past the first sentence of your posts before flagging you and you never get any kind of agreement or traction for anything you post? Why do you bother? Are you a masochist or just stupid?

That One Guy (profile) says:

Re: Trickle down

"You give me $10, I give you back $1," has never worked. The sick part is no one would fall for this in a face-to-face game. But greedy assholes managed to convince a generation of politicians that it would work.

Yet more proof that politicians are all idiots. If you needed any more proof.

As pointed out by others, politicians bought it(and were bought) because for the companies and them it does work. The companies get more money, and in return they kick some of that to the politicians that gave it to them via ‘donations’.

The politicians aren’t stupid(on this matter anyway), ‘merely’ corrupt.

Drunk Uncle Sam says:

Corporate subsidies need to stop.
The only time government should help industry is when it is in the nation’s best interest and that does not include the lining of one’s pants with the hard earned efforts of folk who struggle every day while corporate laughs it up at lavish cocktail parties trading stories about how they screwed over the little people.

Greevar (profile) says:

Re: Re:

I disagree with that because I think that those who profit the most from society should also bear the most financial burden to keep it running for the benefit of all. More so, the investors that make obscene amounts of money merely because of the fact that they have obscene amounts of money to invest should bear the largest burden. Nobody who makes millions or billions has ever “earned” it.

Anonymous Coward says:

Re: Re: Re:

Nobody who makes millions or billions has ever "earned" it.

Millions, maybe.

If you look at salaried jobs, among the highest-paid jobs is that of an anaesthesiologist, at about $112/hr. It’s a job with life-or-death consequences and the resultant stress, which requires a lot of knowledge and continuous education, as well as professional liability if you get something wrong. I’d say that it’s fair to put that kind of job at the uppermost tier of hourly earnings.

$112/hr 40hr/wk 52 wk/yr = c. $233,000/yr.

An anaesthesiologist could earn a million dollars in less than five years, and I would say that, yes, they’ve probably earned it. They took the time to get educated as a doctor, and then again as a specialist, and then they showed up for a stressful, difficult job, day after day.

However, it would take the same doctor almost 4,300 years for them to earn a billion dollars. Even if they worked a grueling 100 hr/wk, they’d need 1,750 years to earn that much.

So, while I agree that no one who makes billions has ever "earned" that money, I’d be a bit more generous about "millions."

Anonymous Coward says:

Re: Re: Re: Re:

So, while I agree that no one who makes billions has ever "earned" that money, I’d be a bit more generous about "millions."

What about something like penicillin, that’s saved millions of lives? Even using a very low value of $1000/life, one could say Fleming "deserved" a billion dollars. (He didn’t get it of course, and while modern tech companies act like their inventions are just as revolutionary, they aren’t.)

Anonymous Coward says:

Re: Re: Re:2 Re:

Fleming performed a service to humanity, no question. And the end result of that service was worth billions, also no question. However, I think you’re giving Fleming himself a bit too much individual credit by saying that he deserves full recompense for every life saved from penicillin.

For one thing, it’s not like people hadn’t been studying the antibacterial properties of the Penicillium fungus before Fleming left his window open and accidentally let his samples get contaminated with it. It’s likely that someone else would have figured it out if Fleming hadn’t (albeit perhaps somewhat later).

For another, it took a lot of hard work by a lot of other people to get penicillin from "This inhibits bacterial growth and is non-toxic but is unstable and hard to produce" (where Fleming left it) to "this is the drug we use as a first-line panacea for bacterial infections." Giving Fleming sole credit for all of those lives saved erases their work entirely.

Fleming put in a dozen years of his life into taking his fortuitous discovery, researching it, proving it safe, and attempting to make it stable for mass-production. And, yes, absolutely I believe he deserved to be better compensated for that work than he was.

But billions? No way.

Anonymous Coward says:

Re: Re: Re: Re:

Failure == not earning billions? You have a twisted view of the world. You equate “earn” with successfully bilking others out of their money. While it does take some amount of effort, “earning” billions is nothing at all like working a real job to take home a small paycheck.

There should be limits on personal and corporate wealth. And I say this as someone would would probably be impacted by such a thing.

James Burkhardt (profile) says:

Re: Re: Re: Re:

So, the fun bit about our tax system is until the 1980’s we had a 70% marginal tax rate. So we actually understand how companies handle this type of tax. And it isn’t run away. Instead, Capital Expenditures become more favored, because large expenses help offset large revenues. So companies reinvest income in their businesses as a way to avoid larger taxes. (Contrast this with the notion that after tax cuts businesses reinvest the extra profits, investments which failed to materialize).

And at the worker level right now, companies punish success and productivity while rewarding failure. I know a manager who learned his new office employee (required to be at work at certain hours) did all his work properly and had significant free time that he used to play games. The manager wanted to fire him for playing games, or increase his workload without increasing his pay. This explicitly punishes the employee’s productivity. He either does what his co-workers have done, and stop being so productive, or leaves, costing the company the highly productive employee. Why should our tax policy reward the success of businesses who do not reward the productivity of its workers?

David says:

Bad headline.

AT&T’s Planning Yet More Layoffs Despite Tens Of Billions In Tax Breaks And Government Favors

There is no connection here. They owe it to their shareholders to make the most money. Cutting jobs is one way of making money. Telling the government lies and promises in return for money is another. They have nothing to do with each other as long as we are talking about job promises and not contractually mandated job guarantees or hard marketing pressure. And even those don’t count as long as the penalties for ignoring either are less than the savings.

Unless you write down every promise and hit hard and consistently for each broken promise, there is no connection between the promises and the ability to make money. So there also should be no connection between the promises and government payouts.

Anonymous Coward says:

Re: Bad headline.

They owe it to their shareholders to make the most money

This is a common misconception. Corporations have no obligation, legal or moral, to make more money. Failure to do so might result in a share selloff and possibly collapse the company but there is no requirement except in self-preservation.

Growing larger, making more money, etc. are all purely selfish actions. If the corp makes more the execs make more. That’s all there is to it.

So yes, the tax breaks and the layoffs are related. They get the tax breaks by promising to create more jobs then, instead, once they get the money the eliminate more jobs. They lied and should be punished. The money should be returned to the public along with properly hefty fines.

That One Guy (profile) says:

Re: On the contrary, perfect fine headline

Yet somehow, we here in America never quite learn the lesson. Case in point: you might recall that in late 2017 AT&T CEO Randall Stephenson told anybody who’d listen that the Trump era tax cuts (which granted AT&T a $20 billion one-time windfall and $3 billion in extra cash every year thereafter) would create upwards of 7,000 new high-paying jobs paying $70-$80k.

When the company claims that if they get a multi-billion dollar tax cut(or several as the case may be, one single large, many ongoing smaller) they’ll be hiring thousands of people rather than laying them off, it is absolutely relevant to point out that they got their tax cut and are getting rid of jobs in exact opposition to what they previously claimed.

That the odds of them being punished for lying through their teeth is basically zero does not make their action of doing so any less worthy of note and objection.

Anonymous Coward says:

Re: Re: Nope, bad headline.

“Bad headline” means “bad headline” not “unmotivated article”. The headline was “AT&T’s Planning Yet More Layoffs Despite Tens Of Billions In Tax Breaks And Government Favors”, and I explained why “despite” is a logic error. It should have been “AT&T’s Planning Yet More Layoffs. In completely unrelated news, it got tens of billions in tax breaks and government favors in connection with unsubstantiated rumors about job creation”. And I’d be fine with a subtitle of “let’s make sure these two things are incompatible in future”.

But a lot of people are paid a lot of money in order to sugarcoat that this is going to happen again. And again. And again and again and again.

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