Two years after the Republican-led Federal Communications Commission voted to ditch the net neutrality rules put in place during the Obama administration, AT&T, which along with other big telecom companies said that repealing the rules would let it step up job-creating capital investments, is getting set to slash thousands of jobs from its workforce.
Far from increasing its CAPEX—that is, capital expenditures on such projects as adding miles of new fiber-optic cables to its network—AT&T will slash its total expected cash layouts by $3 billion next year, according to a report by TechDirt.
The cutbacks also come two years after Trump's massive tax cut bill passed in December of 2017 that was also allegedly designed to set off a wave of new corporate spending—a claim that at the time was lauded enthusiastically by AT&T CEO Randall Stephenson.
“Lower taxes drives more investment, drives more hiring, drives greater wages,” Stephenson said in a CNBC interview in the run-up to the tax cut bill’s passage, adding that AT&T would add about 7,000 new “hard hat” jobs for every $1 billion of new capital investment.
“To think that wouldn’t cause additional investment is nonsensical,” Stephenson told CNBC. “I know exactly what AT&T would do: We would invest more.”
In fact, that turned out to be the opposite of what AT&T will now do. And instead of adding new jobs, the company’s Chief Operating Officer John Stankey said this week that the telecom giant was looking to cut costs across the board, calling all of the company’s operations including the labor force a " target-rich environment."
Though Stankey, who is expected to take over AT&T when Stephenson steps down, did not use the term “layoffs,” the company’s Chief Financial Officer said that the cost-cutting will hit employees, contractors, and employee benefit packages as AT&T looks to trim four percent of its labor expenses.
Net neutrality repeal took effect in June of 2018. In that year the “big four” telecom firms Verizon, AT&T, Comcast and Charter trimmed investments by more than $200 million, from $57.1 billion the previous year down to $56.9 billion.
In AT&T’s case, the company has taken on a massive debt load through purchases of DirectTV and the TimeWarner Corporation.
Photo By Brownings / Wikimedia Commons Public Domain
