AT&T Layoffs On The Horizon As Carrier Reduces Headcount One Year After Tax Reform Windfall

AT&T is preparing for a round of layoffs one year after the carrier giant pledged that the benefits it received from the Tax Cuts and Jobs Act would lead to $1 billion in company investment and 7,000 new jobs.

“To win in this new world, we must continue to lower costs and keep getting faster, leaner, and more agile,” AT&T Vice President of Technology and Operations Jeff McElfresh said in an internal memo obtained by Motherboard. “This includes reductions in our organization, and others across the company, which will begin later this month and take place over several months.”

AT&T confirmed the staff reductions to CRN.

"We are hiring to meet the needs of the growth areas of our business. In fact, we hired more than 20,000 new employees last year and more than 17,000 the year before. In cases where we do have to adjust our workforce, we take steps to lessen the effect on employees," said a spokesperson for AT&T.

The Dallas-based carrier said the most recent round of layoffs would only affect a "very small" portion of its overall workforce.

[Related: AT&T Channel Chief: 'Now, We are Challenging Our Solution Providers']

Motherboard reported that the staff reduction will consolidate certain aspects of AT&T operations in 10 major operational hubs across New York, California, Texas, New Jersey, Washington State, Colorado, Georgia, Illinois, Missouri, and Washington, DC.

The latest announcement comes one year after AT&T last January praised tax reform during its fourth-quarter 2017 earnings call on Jan. 31, reporting a $19 billion quarterly profit. AT&T said it would be investing $1 billion into its business throughout 2018, and the carrier's CEO, Randall Stephenson, said that would result in the creation of 7,000 new, high-paying jobs.

AT&T did not confirm to CRN whether the carrier completed its promised $1 billion investment last year. During the last quarter of 2017, however, AT&T paid out more than $200 million in bonuses to frontline employees after tax reform came to fruition.

Two solution providers that spoke to CRN under the condition of anonymity in December said that tax reform hasn't resulted in any "noticeable change" in terms of investment in new positions with the carrier's channel organizations since it was passed at the end of 2017.

AT&T isn't the only service provider struggling with headcount right now. Basking Ridge, N.J.-based competitor Verizon in December revealed that it would be slashing 7 percent of its workforce. The carrier said 10,400 of its employees accepted buyouts and will be leaving the company by June as part of what it is calling a “voluntary separation program."