AT&T union, prepping for strike, details deep layoffs it says counter tax reform vows

Mike Snider | USA TODAY

Show Caption Hide Caption Trump touts benefits seen from tax cuts President Donald Trump gathered workers from around the U.S. to help show the benefits that are being seen from the tax cut plan recently passed. (April 12)

A major union preparing to strike against AT&T has compiled a detailed report of U.S. layoffs and call center closures that it says shows the telecom giant has violated its own post-tax reform promises.

The Communications Workers of America, which is in ongoing contract talks with AT&T on behalf of 14,000 workers in Illinois, Indiana, Michigan, Ohio and Wisconsin, as well as its nationwide Legacy T contract, says the company has been cutting call center workers in favor of outsourcing, despite its promises to invest in its workers after President Trump's sweeping tax cuts.

In December, AT&T issued $1,000 bonuses to more than 200,000 employees after the tax reform bill's passage. The company also promised to increase investment in the U.S. and, the union charges, implied hiring increases.

More: Unions to companies: Show me the money from the tax cut

However, the union says over the past seven years, AT&T has laid off 16,000 call center workers nationwide, while closing 44 call centers, according to a CWA report out today — an early copy of which was obtained by USA TODAY. Many of those jobs have been outsourced to call centers in countries including Canada, Colombia and El Salvador, the union says, and it continued that trend in December.

AT&T counters that the CWA “consistently fails to point out" that the company has hired more than 87,000 in the U.S. in the last three years (17,000 in 2017) and is currently looking to hire thousands more in 2018, said AT&T spokesman Marty Richter. Most union workers are offered another job with the company if their job is eliminated, he said.

But the union charges that the jobs cuts that are occurring unfairly hurt longtime employees, in favor of outsourced and contracted labor. "The outsourcing has created a sense of insecurity for folks," said Linda Hinton, CWA's AT&T Midwest vice president.

"(AT&T CEO) Randall Stephenson has said on several occasions he was committed to raising wages and creating good-paying jobs," she said. "We are trying to hold his feet to the fire on this. This is what you said, and this is what we expect."

The report is the latest salvo in the battle between unions and major corporations over who gets to reap rewards from the tax reform measures passed in 2017. AT&T was an early and vocal supporter of the tax cuts. The CWA and other unions have pressured companies to reveal the size of their tax windfall and what they plan to do with it — and what portion would be used to raise wages, bring back jobs from overseas and make capital investments.

In November 2017, Stephenson announced his support for the tax-reform measure and, in December after its passage, said, “This tax reform will drive economic growth and create good-paying jobs. In fact, we will increase our U.S. investment and pay a special bonus to our U.S. employees."

When it reported its fourth-quarter 2017 financials, AT&T said that tax reform helped boost the quarter's net income to $19 billion, compared to $2.4 billion in the same period a year before.



AT&T gave out those $1,000 bonuses — $200 million in bonus payments total — and $800 million in funding to its employee and retiree medical trust, Richter says.

But it also announced 1,540 layoffs across the U.S. in December, the union says. Layoffs included more than 430 call center workers. Others affected were technicians, with the largest group (590) being installation technicians who set up equipment in customer homes, the union says.

Over the past two years, the company has closed four call centers in Michigan and Ohio, the union says, and has laid off 2,300 workers in the past three years in Illinois, Michigan, Ohio and Wisconsin.

AT&T is adjusting its workforce in parts of the country where it's seeing lower demand for legacy services such as landline and DSL services, AT&T's Richter says, and adding workers where there's increased demand for products and services.

At a call center in Appleton, Wis., where 400 employees worked three years ago, now only about 30 workers remain. Those workers constantly worry about their own jobs being cut, says Betsy LaFontaine, a union member who has worked there for almost 30 years. "What frustrates me is, at the end of the year when the tax law changed, ... there were promises there was going to be investment, domestic job growth and they were going to expand infrastructure," she said. "At this particular point, it seems that promise is being broken, based on what is going on in the negotiations."

The union membership has authorized a strike if negotiations on the contract, which expired April 14, do not prove fruitful.

"They are looking for the cheapest possible labor handling sensitive information," LaFontaine said.

In 2015, AT&T paid $25 million as part of a settlement with the Federal Communications Commission into breaches at its call centers in Colombia, Mexico and the Philippines. Other countries with AT&T call centers include Canada, Costa Rica, Dominican Republic and Jamaica.

AT&T has, in the past, agreed to bring back some outsourced jobs during negotiations with the CWA. These included negotiations last year involving 3,000 jobs at AT&T Southwest, the union notes. And two years ago, an agreement with CWA and Verizon brought back 1,300 call center jobs in the northeast and mid-Atlantic states.

"We certainly know that technology will change things," Hinton said, "but it shouldn’t for the American worker actually when we can be trained to do it."

Follow USA TODAY reporter Mike Snider on Twitter: @MikeSnider.