Telecoms giant AT&T is at the top of its industry and making billions, yet the company is still firing thousands of American workers.
In June of this year, AT&T completed its $85 billion acquisition of media giant Time Warner, and according to the company’s most recent investor briefing, that merger is already proving to be quite lucrative in addition to the company’s wireless phone and internet divisions. The briefing shows that, in the second quarter of 2018 alone, AT&T took in $39 billion in consolidated revenues, and its cash from operations is at $10.2 billion. That’s a 17.5 percent increase from the second quarter of 2017, according to the investor briefing.
The company added 3.8 million new wireless subscribers, with 3.1 million of those coming from the United States, and 342,000 new DirecTV subscribers, for a total of 1.8 million. AT&T also added tens of thousands of new broadband internet subscribers. Ad revenue from Turner — the parent company of CNN that was included in the Time Warner acquisition — is also up three percent.
So, given its financial success, why is AT&T still laying off workers and outsourcing labor?
A recent report for The Guardian claimed the company has fired more than 16,000 people since 2011, mostly at 44 U.S.-based call centers that have been shut down in order to hire more people in countries like Mexico, India, and the Philippines who will work for less than $2/hour. Four American call centers were closed in 2018.
“They’re liquidating us,” AT&T call center worker Betsy LaFontaine told The Guardian. “This is not a poor company. On the shoulders of all its employees, we’ve made the company extremely profitable.”
The company became even more profitable after the passage of the Republican tax cut bill in December of 2017. A month before the bill was passed, AT&T chairman and CEO Randall Stephenson praised the tax cuts, saying the legislation would “spur much-needed investment and economic growth.”
However, the “investment” Stephenson was referring to is primarily just for the wealthy, given that the company is continuing to outsource labor while simultaneously spending more than $400 million on buying up share of its own stock (which drives up the value of options owned by executives) in the second quarter of this year. Since Stephenson promised to create 7,000 new jobs paying between $70,000 and $80,000 per year, AT&T has actually cut thousands of jobs, according to the Communications Workers of America union.
AT&T isn’t the only telecoms giant making huge profits while laying off workers. Earlier this year, Grit Post reported on Comcast firing approximately 500 sales workers just ten days before Christmas, right before President Trump signed the tax bill into law. Berkshire Hathaway’s Business Wire reported that Comcast had cash from operations exceeding $21 billion and earnings per share up by 167 percent at the end of 2017, meaning those layoffs were likely completely unnecessary.
Logan Espinoza is a freelance contributor specializing in economic issues. He lives in Phoenix, Arizona with his wife and daughter. Contact him at logan DOT espinoza AT yahoo DOT com.