Shortly after receiving a gigantic new tax break, telecom behemoth AT&T is already planning to cut 4,600 workers from its labor force.
ABC News reported that the newly announced layoffs constitute roughly 1.5 percent of AT&T’s workforce, and comes on the heels of a previously announced plan for the company to fire 10,000 workers over a three-year period. The layoffs are happening despite AT&T posting record profits last year.
The telecom provider was one of the loudest voices on capitol hill in 2017 prior to the passage of the Republican tax bill that included a slash in the corporate tax rate, from 35 percent to 21 percent. According to the Center for Responsive Politics, AT&T spent more than $13 million on lobbying Congress in 2017 alone. The company also filed 29 lobbying reports last year for taxes, making that the largest area of focus aside from telecommunications.
After the tax bill’s passage, AT&T CEO Randall Stephenson said the new changes to the U.S. tax code “will drive economic growth and create good-paying jobs.” And when the bill was first introduced in November, Stephenson said the new proposed corporate tax rates would lead to more jobs created.
“Comprehensive tax reform with competitive business tax rates will ensure lasting economic growth, investment and job creation,” Stephenson said in a public statement.
The new layoffs appear to be part of a trend in the telecom industry, as Comcast also announced several hundred layoffs shortly before the tax bill’s passage — even as the company was aggressively lobbying for its passage.
It would appear that the new tax breaks for multinational corporations are having little effect on company’s hiring decisions, which CEOs themselves already hinted at during a November meeting of the Wall Street Journal’s CEO council. When a Wall Street Journal editor asked for a show of hands from CEOs who would increase capital investment if the tax bill passed during a session featuring National Economic Council director Gary Cohn, very few hands went up.
Matthew P. Robbins is a freelance economics contributor covering wages, budgets, and taxes. He lives in Chicago, Illinois with his husband and two cats.