AT&T said Trump's tax cut would create jobs – now it's laying off thousands of workers
Since the coronavirus pandemic began, the telecoms giant AT&T has announced permanent closures of hundreds of retail stores around the US and laid off thousands of workers.
The closures and losses include 320 company-owned retail stores announced in November and December 2020 and 250 stores announced in June 2020, including an estimated 3,400 cuts in technician, clerical, managerial and executive roles.
The moves come despite the company’s keen support for a major corporate tax cut under Donald Trump, which it claimed would spur it to create jobs – not cut them.
AT&T is also closing dozens of retail stores this spring around the US, including three stores in the MinneapolisSt Paul, Minnesota, area where workers and their union, the Communications Workers of America Local 7250, are pushing back against the cuts.
“It’s a move that will erase living wage jobs replaced by non-union, substandard jobs in terms of wages, benefits and safety,” said the CWA Local 7250 president, Kieran Knutson. “It’s an attack on this group of workers, the communities that they’re in and on our union.”
Mali Flores has worked as a sales representative in the Twin Cities area of Minnesota for two years and recently learned her store will be shut down. Once the store closes, Flores will be moved to a remote customer service position where she will make less money.
“It’s very devastating. I’m basically the head of my household. I’m having to budget a little more. I’ve been having a lot of anxiety about how I am going to come up with extra funds for my kids,” Flores said.
Flores said her commission was anywhere between $800 to $1,500 a month, which she will no longer receive working remotely. Though AT&T has informed her they plan to provide some sort of additional compensation for the first year, she is concerned about what happens after that. Flores and her family have already been struggling financially due to the pandemic, and for the local communities who relied on the store as it was the only nearby location with Spanish speakers available.
“They told us it’s closing because of performance, but we were in the top 15% in sales for AT&T in the nation,” she added. “We never thought we were going to get closed down. It was heartbreaking because we don’t only cater to our local community, but the neighboring communities as well.”
When AT&T first began rolling out the store closures during the pandemic, they cited the cuts as part of a $6bn cost-cutting plan that the pandemic gave AT&T a “head-start” in implementing it. The CWA has noted retail cuts and an emphasis on an authorized retailer model were part of plans proposed by the hedge fund Elliot Management before the pandemic.
AT&T lobbied aggressively in favor of the 2017 Trump tax cuts, promising to create 7,000 new jobs and invest $1bn in capital expenditures if it passed. AT&T saved an estimated $21bn when the tax cuts passed and the company saved an estimated $3bn annually due to the lower corporate tax rate from 35% to 21%.
Since the tax cuts, AT&T eliminated more than 42,000 jobs even before the first retail store closures in June 2020 went into effect.
Larry Thompson, a retail sales consultant for AT&T in St Paul, Minnesota, who serves as the chief steward and area vice-president for retail at CWA Local 7250, explained these store closures are part of a trend nationwide where AT&T is closing down corporateowned stores and transitioning to a model that utilizes non-union, authorized retailers.
The union is working to spread public awareness, get elected officials involved and assert to AT&T leadership that workers and the union will fight to prevent the ongoing job cuts and store closures.
“This company promises a lot of things. They received a lot of tax cuts with the expectation that we would have long-term jobs and a long-term solution,” said Thompson. “We aren’t going to go away. We’re going to go down fighting.”
A spokesperson for AT&T said the upcoming store closures were among those announced late last year. They cited changing consumer habits as the reason for the closures, and that AT&T has provided existing authorized retail partners opportunities to buy the closing stores.
“We are transforming our business. That includes announcing last fall that we were adjusting our retail presence to reflect our customers’ shopping practices, which changed more quickly because of the pandemic,” said the spokesperson in an email. “Represented employees at affected stores were offered other union positions within the company. We are
proud to be one of the largest union-represented companies and the only unionized wireless company.”