Updated as of 8/13/2020
AT&T Layoff Crystal Ball
I recently received some information from colleagues that are associated with the telecommunications industry and I summarized what they stated. This is an opinion and from sources deemed reliable. My story is titled the AT&T Layoff Crystal Ball.
For a crystal Ball of AT&T layoffs, referred as “headcount-rationalization”, one need to look no further than the Elliott Management(Paul Singer) Memo. The memo discusses what AT&T needs to change to create shareholder value for its stockholders. The problem is when Paul Singer agitates, a lot of people lose their jobs.
Singer wants to fix the Randall Stephenson poor management and high debt missteps of T-mobile, DirectTV and TM deals. Singers reputation precedes him as the momentum is now on Singers side and he is relentless in getting what he wants and he wants to cut costs & expenses.
Per his Singers memo titled “Activate AT&T”, he states AT&T has 2-3x more management layers than peers like Verizon. Estimates Numbers I am hearing are 25% layoffs up to level 3 and 30%-40% in the AVP level. Also Singer states Revenue Per Employee is 30% higher at Verizon than at AT&T(= Layoffs). The solution per Singer is divesting non core businesses, outsource/rebadging and again lots of rightsizing( layoffs).
Stores and Real Estate Needs to be sold or closed. As Stankey stated “I have been on the path of reducing real estate,” and amid the pandemic his team was considering accelerating that shift. There are too many retail stores(Pre CV-19) as they overlap and cannibalize each other. Stores estimated at 400 need to close(See 250 stores closings here) . Singer wants cash so T can pay down debt and buy more T stock at an accretive level(currently at 50% of intrinsic value).
It is publicly known that AT&T will divest other assets and per Singer will increase to reach $15b in asset sales this year. Current deals are WB Gaming for sale for $4B, Conversations with staff tell me DirectTV will be on the block for sale in the next 60-90 days
I received four separate 4th level + conversations that we should see craft announcements on Wed – June 17 and on Fri – June 19 . Additional Craft announcements in Q4. Also communicated to me is that management workers should see notices sent predominantly by “email” with some calls by July 10th and given two (2) weeks rather than the former 60 days. AT&T needs everyone off the books by August 1st.. For those that stay , I was informed that job titles could change effective August 1st. There will also be an increase in rebadging/outsourcing Amdocs, Tech Mahindra, Accenture, IBM,. Although not a fan see Video from Tucker Carlson at 1:06
But based on the numbers I’ve surveyed across the country in various organizations, the minimum number for cuts has been about 15% . Although many in IT, HR, Consumer, Business, Finance, etc are hearing 30%, the insulting quote “the peanut butter will not be spread evenly” will apply. The environment in the coming weeks is best described by AT&T Executive who stated “I don’t want to sugar coat things here, it’s coming up and will be significant….”
Even at the low end of this scale, applied across the company, we are looking at 40,000 -50,000 layoffs.
Layoffs are not the only thing I’m seeing in my crystal ball. As I stated before Singer wants to cut expenses and AT&T’s pension obligation is a very large expense. There have been major indications that a pension freeze could be on AT&T’s horizon. A post on Layoff.com/at-and-t quoted Stankey saying, “new employees don’t come here to work 30-35 years and frankly we may not want them to either”. This begs the question, if Stankey doesn’t want people to stay for 30 years, why would he want a 30 year pension plan? Stankey followed up those comments by saying, “the benefits need to match the tenure”. He must be referring to the pension benefits considering the only benefit tied to tenure is the pension plan. Given these new developments we believe that AT&T’s pension plan is going to be frozen in the near future.
UPDATE: Other Layoff news
McElfresh BofA Transcript
“AT&T Layoffs – TheLayoff.Com.” TheLayoff.Com, https://www.thelayoff.com/at-and-t. Accessed 13 Aug. 2020.
Feiner, Lauren. “WarnerMedia CEO Reorganizes Company with Layoffs, Focus on HBO Max.” CNBC, CNBC, 7 Aug. 2020, https://www.cnbc.com/2020/08/07/warnermedia-ceo-reorganizes-company-with-layoffs-focus-on-hbo-max.html.
Dua, Tanya. “AT&T Lays off People in Its Consumer Marketing Unit – Business Insider.” Business Insider, Business Insider, 6 Aug. 2020, https://www.businessinsider.com/att-lays-off-people-in-its-consumer-marketing-unit-2020-8.
For AT&T articles, you can visit https://techstaffer.blog/tag/att/