AT&T Said Trump Tax Cuts Would Create Thousands Of Jobs. Instead, AT&T's Laying Off Thousands.

from the head-fake dept

It seems like only yesterday that AT&T CEO Randall Stephenson was promising on live television that if Trump followed through on his tax cuts, the company would dramatically boost investment, in the process creating thousands of new jobs. Not "entry-level jobs," mind you, but "7,000 jobs of people putting fiber in the ground, hard-hat jobs that make $70,000 to $80,000 per year." Each $1 billion in new investment, AT&T insisted, would result in 7,000 new jobs. "Lower taxes drives more investment, drives more hiring, drives greater wages," Stephenson said.

Yeah, about that.

Here on planet Earth, AT&T has revealed that the company's slated CAPEX for 2020 will actually be decreasing by about $3 billion next year. The company is also preparing to engage in a new round of significant job cuts as it fights off an ongoing investor revolt triggered by the company's bumbling obsession with merger mania, and a continued exodus of video subscribers caused by relentless price hikes and branding incompetence.

It's unclear how many employees will lose their jobs and/or benefits with this latest round of cuts (one of several in just the last few years), but the scale isn't expected to be subtle:

"Everything is on the table," AT&T COO John Stankey said Tuesday at the UBS Global TMT Conference in New York. "It's a target-rich environment."

AT&T's cost-reduction program initially will include a 4% cut in the operator's labor expenses -- representing roughly $1.5 billion of the operator's finances -- next year. During an investor event last week, AT&T CFO John Stephens explained that the initiative would target employees, contractors, benefits "and so forth."

That is, if you're playing along at home, the precise opposite of what Stephenson promised.

The Trump tax cut resulted in AT&T getting billions in immediate tax relief, and roughly $3 billion in tax savings annually, in perpetuity. Yet when it came time for AT&T to re-invest this money back into its network and employees as promised, the company actually did the opposite and began laying them off in droves. Unions claim AT&T has laid off an estimated 23,000 workers worldwide since the Trump tax plan, with investors and executives unsurprisingly pocketing the savings. Anything even vaguely resembling accountability for these false promises has been utterly nonexistent.

The dip in overall CAPEX is also the exact opposite of what AT&T claimed when it lobbied for the elimination of net neutrality. You'll recall AT&T executives and lobbyists repeatedly claimed that the FCC's net neutrality rules stifled sector investment, a claim indisputably disproven by an endless number of studies and reports. Even telecom CEOs themselves are on record clearly stating this investment apocalypse never actually occurred. Granted, it's worth noting AT&T has received countless billions in other regulatory favors thanks to a rubber stamp FCC; efforts just as unlikely to result in new jobs or network investment.

Again, nobody anywhere has actually held AT&T accountable for these falsehoods. Nor is there any indication, on absolutely any front, that anybody intends to. And in the post-truth era, the folks who supported throwing billions at AT&T for doing nothing still somehow suggest the decision worked wonders, despite a convoy of evidence and data making it abundantly clear that's not true. All told, you can be fairly sure we'll learn absolutely nothing from this experience, and before long AT&T will line up, hand outstretched, quite accurately expecting Uncle Sam to repeat the process all over again.

After all, the company has been engaged in some variation of the same tap dance for the better part of the last few decades with only fleeting efforts to do anything about it.

Filed Under: donald trump, jobs, layoffs, randall stephenson, tax cuts
Companies: at&t


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  • icon
    That One Guy (profile), 12 Dec 2019 @ 5:06am

    Less naive ignorance, more corrupt indifference

    All told, you can be fairly sure we'll learn absolutely nothing from this experience, and before long AT&T will line up, hand outstretched, quite accurately expecting Uncle Sam to repeat the process all over again.

    I'd argue that saying nothing will be learned isn't quite accurate, as those that have been paying attention almost certainly knew that the claims were lies from the start, with the problem being that those that bought the lies didn't care so long as they got a cut. As OpenSecrets notes AT&T is most certainly not shy about sharing the wealth, clocking in at 19 of 15,852 with $2,469,105 in contributions for 2019, and 14 of 3,795 with $10,340,000 spent on lobbying during the same time period.

    The problem isn't that nothing has been learned over the years, it's that it has been, namely that giving companies like AT&T tax cuts and/or other financial breaks/'incentives' ensures lucrative 'donations' to politicians continue to flow, and since the politicians are the ones giving those deals the incentives are very much towards 'throw money at the large company, and to hell with the public and broken promises'.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 12 Dec 2019 @ 10:04pm

      Re: Less naive ignorance, more corrupt indifference

      You can't believe what this company says in public. It has a horrible track record for screwing over consumers.

      reply to this | link to this | view in chronology ]

  • identicon
    David, 12 Dec 2019 @ 7:07am

    Not an accurate characterisation

    Again, nobody anywhere has actually held AT&T accountable for these falsehoods. Nor is there any indication, on absolutely any front, that anybody intends to.

    You seem to be deluded about the difference between an investment program and an incentivisation program.

    The former is the big state program and money is getting paid conditional on results. It's an expensive way of garnering votes that is fundamentally disadvantageous to the incumbent.

    An incentivisation program instead pays money conditional on promises. Since promises are considerably more affordable, they offer better return of investment in the form of votes.

    In addition, promises are a sustainable resource: you can pay for the same promises on a recurring basis and get them again and again for the sake of the next election.

    In contrast, actual investments are something causing a difference and you need to come up with new ideas all the time while the old ideas are getting implemented.

    So the way AT&T is held accountable for their reliable delivery of promises in return for money is to continue relying on them for delivering promises in return for money.

    Why change a successful long-term strategy for something that is guaranteed to only work once?

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 12 Dec 2019 @ 8:13am

    "an investment program and an incentivisation program"

    I don't know ... they both look like corporate welfare to me.

    reply to this | link to this | view in chronology ]

  • icon
    nerdrage (profile), 12 Dec 2019 @ 9:00am

    right idea, bad execution

    AT&T had the right idea buying Time Warner. Disney is now in the process of proving how crucial it is to have big global brands to use in streaming, movies and related businesses (like merchandise). Disney bought Star Wars, made The Mandalorian, now is making money off Baby Yoda dolls, and it knew there was demand for Baby Yoda by looking at their own streaming data. That's how it's gonna work from now on. Streaming as the nerve center for the whole business, and big brands to bring in big numbers of subscribers to generate that data.

    AT&T should be able to follow suit with HBO Max. If they fall on their faces instead, then the layoffs should start in the C-Suite. Because wow AT&T really isn't making smart decisions. Both the name and the price for HBO Max are just bad. They have every advantage, paid for at great cost by investors. If they blow this, then the investors have every right to revolt.

    reply to this | link to this | view in chronology ]

    • identicon
      Kevin Carson, 12 Dec 2019 @ 3:14pm

      Re: right idea, bad execution

      And we'd have the right idea nullifying the copyrights held by Disney, AT&T and every other streaming service in existence, and/or developing easier and lower-risk file-sharing platforms to punish them for trying to force us into an era of dozens of separate price-gouging streaming services. I'd love to watch their share prices plummet to zero and see out culture freed up from corporate enclosure.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 12 Dec 2019 @ 9:56am

    I'm shocked. SHOCKED!

    Well, not that shocked.

    reply to this | link to this | view in chronology ]

  • icon
    DeComposer (profile), 12 Dec 2019 @ 12:21pm

    Accountability?

    I thought the whole point of incorporation was to eliminate accountability.

    reply to this | link to this | view in chronology ]

  • icon
    ECA (profile), 12 Dec 2019 @ 12:40pm

    math

    7000 x $40k=280,000,000..
    $280 million
    Even at $80k...Only 1/2 billion..
    who gets the rest??
    DUH!!!

    reply to this | link to this | view in chronology ]

  • icon
    nasch (profile), 12 Dec 2019 @ 2:45pm

    Investment

    Richard Bennett is not going to like this.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 12 Dec 2019 @ 5:00pm

      Re: Investment

      Nah, he's going to say that "Bodey McBodeface" doesn't understand how to run an ISP and say that the laying off of thousands is a good thing for future investment.

      Then he'll double down and frantically vacuum Pai's baby batter when the investment inevitably doesn't happen.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 12 Dec 2019 @ 5:59pm

    " "Lower taxes drives more investment, drives more hiring, drives greater wages," Stephenson said. "

    I think he's telling the truth about that last part. He just left out that he was referring to his own bonus.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 13 Dec 2019 @ 3:35am

    This is an ATT problem; not a Trump issue. He gave them the ability to expand and unlike countless other companies that are growing and highering - see job and economic numbers- T chose to go rogue. Nice try though.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 13 Dec 2019 @ 7:35am

    I don't think the tax cut was confined to AT&T only. Every last corporation got a tax cut. And tax cuts or no tax cuts doesn't change the fact that landline telephony has been superseded by new technologies, much as switchboard operators were 60-70 years ago.
    Laying the fiber does create the jobs, temporary construction jobs that end once the fiber is laid. I don't know who didn't understand that.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 13 Dec 2019 @ 11:52am

      Re:

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 13 Dec 2019 @ 11:58am

      Re:

      The fiber is barley in. Most services still work on 2000ft of copper to a video fiber box in neighborhood. Fiber project has been halted. When call in to say your service is not working, you are mailed a modem to buy repair time. When you receive new modem and plug in, still not working.
      Now we will send a tech. Trouble was outside all the time. They bought 5 days. Meanwhile a tech is laid off because of no work. There’s work ,they will not show it.

      reply to this | link to this | view in chronology ]

      • icon
        nasch (profile), 13 Dec 2019 @ 12:19pm

        Re: Re:

        The fiber is barley in.

        Well there's the problem. Someone should tell them to use fiberglass instead of barley.

        Sorry. Sort of.

        reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 13 Dec 2019 @ 9:53pm

        Re: Re:

        The copper pair is obsolete. It is obsolete now for telephone. It is becoming obsolete for data. Fiber is the future.

        But AT&T isn't going to just lay fiber where there won't be a return on investment. They were duplicitous in connecting the tax cuts to the laying of fiber, because they were obligated to do so anyhow because of the Direct TV acquisition.

        But going forward, fiber deployment requres return on investment (ROI). It will compete with share buybacks and debt paydown, as well as boosting the cellular data networks. And fiber deployment is probably behind these other considerations in most cases.

        reply to this | link to this | view in chronology ]

  • icon
    tom (profile), 13 Dec 2019 @ 8:13am

    Well to be honest, AT&T's actions likely have created several hundred additional jobs in the debt collection and mortgage foreclosure industries to handle all of the fired AT&T installers.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 13 Dec 2019 @ 4:56pm

    Where angels dare to tread

    At@t is like a Volvo with a gun rack.
    No one goes in because they want to.

    reply to this | link to this | view in chronology ]


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