AT&T’s chief operating officer John Stankey said the Dallas-based company is “set up for a good year next year” but will take a hard look at expenses and find ways to cut costs.

At an investor conference Tuesday morning, Stankey said AT&T will decrease labor costs in the year ahead but didn’t say if that will include layoffs or job freezes. He said every part of the company will be scrutinized.

“No place is safe," he said. "We are looking across the entire business.”

Stankey spoke at a tech, media and telecom conference hosted by UBS in New York City. He stepped in for AT&T’s CEO Randall Stephenson, who was scheduled to speak but was under the weather. Stankey was promoted to chief operating officer in September and is widely considered to be Stephenson’s heir apparent.

AT&T has had a tough few months. It had a public feud with activist investor Elliott Management, which published an open letter criticizing the company’s business strategy and leadership. It has continued to hemorrhage millions of pay-TV customers. And it’s faced skepticism from some analysts, who question whether HBO Max, set to launch in May, can compete with cheaper streaming services like Disney+ that have already debuted.

The company resolved the dispute with Elliott and announced a three-year business plan in October. As part of that resolution, it hired Bill Morrow as special adviser and managing director of process service and cost optimization. Morrow will review the company’s spending and make recommendations.

Stankey said AT&T’s labor costs have declined by about 6% each year. “We are going to step that up a bit,” he said.

One area where AT&T can save is employee benefits, he said. “It’s not about reducing benefits,” he said. “It’s about using the most effective way to serve them.”

He said AT&T will also consider how to “take out layers of cost based on geography we serve and products that we support that maybe have run their course.”

AT&T’s headcount has been shrinking for about four years. The exception is the third quarter of 2018, when it closed the Time Warner deal and absorbed its employees. AT&T had 281,450 employees in 2015, according to its annual report. At the end of September, AT&T’s headcount was 251,840 — a nearly 11% decline.

The Communications Workers of America, a union that represents thousands of AT&T employees, has criticized AT&T, saying the company has broken promises that its savings from the federal government’s corporate tax reform would lead to job creation.

AT&T plans to step up its spending in at least one area. Stephenson has said the company will invest $4 billion over the next three years in HBO Max, a pivotal part of the company’s entertainment strategy.

Stankey said AT&T will heavily promote HBO Max with ad campaigns and new pricing bundles in 2020. He said the streaming service will succeed because its variety of TV shows and movies will resonate with customers of all ages and socioeconomic levels. HBO’s current audience skews older and higher income. And some of its rivals, such as Disney+, have more programs aimed at narrower audiences, such as kids.

HBO Max “is a product that appeals to the entire family and the family wireless plan,” he said. “And it’s something that everybody in the family looks at and says ‘That has something in it for me.'”

HBO Max will cost $15 a month, the same price of HBO, but it will have more content. It’s pricier than streaming rivals, such as Disney+, which costs $6.99 a month, and Netflix, which costs $12.99 a month for its standard package.

During his remarks, Stankey was asked about a lawsuit filed by a group of states challenging the T-Mobile-Sprint merger. The trial began this week. Texas dropped out of the lawsuit in late November, after reaching a settlement with T-Mobile.

Regardless of the trial’s outcome, Stankey said the wireless carriers will have to deal with “a degree of distraction.” If they lose and can’t complete the transaction, they’ll have to figure out a new business strategy. If they win, they’ll begin the tedious business of integrating two companies.

He said he can relate after weathering AT&T’s failed attempt to acquire T-Mobile and prevailing in the Justice Department’s court challenge of the AT&T-Time Warner merger.

“It’s really good that it’s not our turn to be sitting in a federal courtroom,” he said.