The day after Paul Lorenzano found out he was being laid off from his job in January as an AT&T technician in Arcadia, California, the company sent out an email to all employees congratulating the workforce on AT&T’s profits and fiscal performance in 2019.
“We met or exceeded all of our commitments for the year. That’s thanks to a lot of good work on your part,” Randall Stephenson, AT&T’s CEO, said in the email.
Lorenzano was devastated.
“That felt like a complete slap in the face, saying how great we were but here is your final pay stub because we did so great last year so we’re going to keep this money and not invest in back into the employment force like they said they would,” said Lorenzano, who worked at the company for over four years before receiving his termination notice, along with dozens of other AT&T DirecTV technicians across California.
It was not meant to be like this. Huge tax cuts, supported by AT&T, were meant to allow companies to hire more and pay better. But instead AT&T has cut 37,818 jobs in the US from when the Trump tax cut bill first went into effect in 2018 to the end of 2019, with more than 4,000 jobs cut in the last quarter of 2019, based on the company’s quarterly reports.
The company strongly supported the tax cut bill and promised workers a $1,000 bonus ahead of the bill’s passage amid claims of a hiring spree.
The bill, passed in December 2017, cut the corporate tax rate from 35% to 21%, saving AT&T an estimated $21bn initially, with an estimated $3bn in annual savings. Despite AT&T’s promises to invest these savings back into their workforce, the company has shed the number of employees since the bill went into effect, while capital investments have declined. In 2018, AT&T’s capital investments declined to $21.25bn, and the company announced plans to reduce it further in 2020 to $20bn, while rolling out a three-year plan to spend $30bn on stock buybacks.
For newly unemployed workers like Lorenzano that situation has added insult to deep injury.
“AT&T talks about its extensive relations with employees, how you can climb the ladder, that there’s room for growth. When I put all my chips in that basket, all of sudden it gets taken away and now I’m left with nothing. Right now I’m grasping for straws, panicking, trying to figure out what I’m going to do now,” he said.
Overall, workers have not benefited from the Trump tax cut bill, despite several corporations claiming bonuses and wage increases were due to the bill’s passage.
“Even at the time, this was clearly nothing but PR. The economic theory linking corporate tax cuts to wage gains was never supposed to occur immediately. Instead, it runs through a long chain of economic events, starting with increased investment,” said Hunter Blair, budget analyst with the Economic Policy Institute. “Without an uptick in investment, typical workers have no chance of benefiting from the Tax Cuts and Jobs Act. And for the first time since the Great Recession, investment has declined for three straight quarters. With investment cratering, there’s no reason to believe typical workers will see the benefits that proponents of the bill promised.”
As AT&T has reduced investment, the company has continued cutting jobs in 2020, with the layoff of 200 technicians in California. The Communications Workers of America union has warned more than 30,000 additional job cuts or elimination in wages and benefits are coming if the proposals of AT&T’s hedge fund investor, Elliot Management, are enacted.
“I went into working as a technician and went into it for the long term. They lead you to believe that was possible. I invested four years. I wouldn’t do that if I thought otherwise,” said Sean Martinez, 26, one of the technicians who lost their job in Los Angeles. “From everything we hear business is good. Next thing you know we get a heads up that they’re making layoffs. They didn’t explain why.”
AT&T workers have also reported the company is forcing current employees to train foreign replacements as their jobs are being outsourced.
“Some people have already trained their replacements,” said an AT&T computer programmer in New Jersey who requested to remain anonymous for fear of retaliation. “We are at the whim of management. One minute we are told we will be off payroll this year, then we are told we may be off payroll first quarter of next year.”
Another AT&T employee in IT explained they were recently laid off and contracted out to Accenture, where workers are currently training foreign replacement workers from India and eastern Europe.
“I’m seeing that at a wide scale right now. People need to know these jobs are being given away,” one of AT&T’s IT workers said.
Accenture did not respond to multiple requests for comment on this story.
“Like any business, we must align our workforce with the needs of our customers and the business,” a spokesperson for AT&T said in an email. “To the extent possible, we manage staff adjustments through retirements and voluntary departures, and we help affected employees find other positions within the company. For those who can’t, we offer them severance pay and outplacement services.”
Sara Blackwell, a Florida based attorney who represents workers displaced by offshoring or workers on visas, explained AT&T is using contractors to train foreign replacements to save AT&T money while US workers are left to suffer.
“It saves the company millions in wages, pensions, healthcare and even taxes. The victim workers are frozen in fear of losing the ability to work in their industry if they speak to the media,” Blackwell said.
Yigael Chavez, a AT&T DirecTV technician for four years who was laid off on February, argued the job cuts are unnecessary.
“None of us want to see AT&T or DirecTV fail. We love what we do and what we have to offer. If the company actually backs up what they say and do it, it would create a good product, create jobs and income. Unfortunately we haven’t seen any of that,” Chavez said.