AT&T cuts 1,800 jobs as fiber build-out slows

AT&T cuts 1,800 tech jobs across 24 states, according to the Communications Workers of America. (Pixabay)

Ahead of a slowdown on its fiber build-outs, AT&T plans to cut 1,800 jobs from its wireline division by August or September.

Ars Technica reported that AT&T declared more than 1,800 jobs nationwide as "surplus," which means they are slated for elimination across both union and non-union jobs.The 1,800 job cuts across 24 states affect wireline technicians who fix customer issues, do new installs, and build out AT&T's fiber deployments.

As part of its 2015 merger with DirecTV, the Federal Communications Commission required that AT&T expand its deployment of its high-speed, fiber-optic broadband internet service to 12.5 million customer locations, as well as to E-rate eligible schools and libraries, by July of this year.

During an investor conference earlier this month, AT&T Communications CEO John Donovan said that AT&T now has a large inventory of fiber-based assets that it can sell to, and that the build-out actually reached 14.5 million customer locations.

"That's behind us now," Donovan said of the merger commitment. "We'll continue to invest in fiber but we'll do it based on the incremental, economic case. We're not running to any household target."

RELATED: AT&T's Donovan says telco will take a more incremental approach to fiber builds

A press release by the Communications Workers of America (CWA) said notifications of the job cuts started last Thursday, and that the cuts will impact technicians across the following states: Arkansas, California, Connecticut, Florida, Georgia, Illinois, Indiana, Kansas, Kentucky, Louisiana, Michigan, Missouri, Mississippi, North Carolina, New Jersey, Nevada, Ohio, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and Wisconsin.

In addition to the 1,800 job cuts, a CWA analysis from May showed that AT&T has cut 23,328 jobs since the Tax Cuts and Jobs Act was passed near the end of 2017. AT&T CEO Randall Stephenson was a proponent of the tax cut, and said it would lead to the creation of at least 7,000 jobs.

"Our members are proud of their work and of the exceptional service that they provide AT&T’s customers," said CWA Communications Director Beth Allen in an email to FierceTelecom. "These job cuts are part of a trend at AT&T. The company's own numbers show that they employ 23,000 fewer people today than they did at the start of 2018. There's plenty of work to be done if AT&T would invest in maintaining its existing network and making sure that next-generation networks reach every community that they serve."

AT&T contends that the jobs are being reshuffled, not cut, to meet its evolving business needs.

"Due to changes as our business and industry continue to evolve, we are making some staff reductions involving technicians who install and repair certain services and network systems. We’re not commenting on numbers or locations," AT&T said in a statement to FierceTelecom. "It would be misleading to refer to this as 'layoffs.' Most affected CWA-represented employees, included affected employees in the Midwest and Southwest, have a job offer guarantee that ensures they’ll be offered another job with the company -- only those who volunteer to leave or decline a job offer will leave the company.

"In the Southeast, affected employees can choose to participate in our Job Bank Program for up to a year, during which time they receive a severance payment; continue to receive benefits and accrue credit for their pension; and can receive priority consideration and relocation benefits (if applicable) for other job opportunities as a regular employee."

The CWA press release said that it was misleading of AT&T to counter criticism of its job cuts by saying it's hiring new employees, and that workers have the option to relocate. According to Ars Technica, a letter from AT&T to the CWA said that only 27 of about 550 employees declared "surplus" in the Southwest division will be given "follow-the-work" opportunities in which they can take nearly identical jobs in other locations.

AT&T has made large investments in virtualizing its network operations using software-defined networking and automation. It has also spent capex budget on building out its 5G and IoT capabilities. According to an AT&T spokesman, the company has "invested more in the U.S. than other public company" over the past five years by spending over $130 billion on its wireless and wireline networks, including capital investments and acquisitions of wireless spectrum and operations.

During AT&T's first quarter earnings report in April, AT&T announced its business wireline services declined to $6.5 billion, down from $6.75 billion a year ago. Revenue in AT&T's communications segment, which includes high-speed internet, video and legacy voice services was down by 0.4% year over year.

While there has been a decline in AT&T's wireline revenues, Allen told to Ars Technica that there were a lot of places across the country where AT&T could build next-gen networks in areas that haven't been upgraded from copper to fiber.