Will AT&T Follow Verizon? Or Has It Been Doing So Right Along?

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On Wednesday afternoon, Verizon Communications Inc. (NYSE: VZ) confirmed that it offered 44,000 employees voluntary severance packages last month. That’s nearly a quarter of the company’s total workforce.

The Wall Street Journal first reported the offer late in September and yesterday received confirmation from Verizon of the action. The severance offer is part of Verizon’s $10 billion cost-cutting effort that is aimed at positioning the company for what is certain to the expensive rollout of 5G network technology over the next several years.

Competitor AT&T Inc. (NYSE: T) also faces large investments to build out its own 5G network and to pay for its recently closed $85.4 billion acquisition of Time Warner. And while the company has not announced a massive restructuring, it has closed 44 U.S. call centers and chopped more than 16,000 call center jobs since 2011, according to a recent report in the Guardian.

In April, AT&T’s workers’ union, the Communication Workers of America (CWA), authorized a strike of some 14,000 members in the company’s Legacy Unit after contract talks stalled. The walkout has not occurred yet, and no timeline has been set to begin a strike.

Unlike AT&T, Verizon recently signed a new four-year contract with the CWA covering about 34,000 workers, mainly technicians and call center workers. That contract, according to the union, resulted from the success of a 2016 strike against Verizon.

The next month, the CWA filed a complaint against the company for failing to notify the union of how much AT&T stands to gain from the tax cuts enacted last year and how the company plans to spend the windfall. According to the union, such notification is required by the union contract. The complaint is still pending.

AT&T has countered by saying that the company has created 188,000 U.S. jobs since 2011 and that “technology improvements are driving higher efficiencies … and we must sometimes adjust our workforce in some of those areas.” The company also notes that “most” union employees have a guaranteed offer of another job with AT&T if their current job is eliminated.

All that is cold comfort if you’ve worked for AT&T for 10 or 15 years, your job is eliminated and you’re offered a new one halfway across the country.

The Indy Star, a USA Today affiliate, reported in August that 12% of AT&T’s technicians in the Indianapolis area were being cut. Local CWA vice-president Larry Robbins told the newspaper, “We believe there’s more than 4,000 people AT&T has (notified of layoffs) across the country. We believe the … promise of 7,000 new jobs [is] all a publicity stunt.”

Verizon appears to be offering buyouts in one big push while AT&T appears to prefer a more piecemeal approach that has so far not included buyouts. Either way, the result is likely to be the same: more employees will lose their jobs as the companies start stacking up their cash for the investments that will be needed over the next several years to upgrade to 5G networks.