AT&T is laying off thousands of workers and shutting down at least 250 stores
Flickr / Mike Mozart
AT&T cuts 3,400 jobs and closes more than 250 stores, a union representing the company's employees said Tuesday.
The job cuts are part of the economic impact of the coronavirus pandemic and the airline's efforts to focus on growth areas, AT&T said.
The layoffs take place as Chief Operating Officer John Stankey prepares to take over the management in July.
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According to a statement by Communications Workers of America, a union that represents AT&T employees, AT&T will cut 3,400 jobs and close 250 stores over the next few weeks.
The AT & T Mobility and Cricket Wireless retail closings will affect 1,300 jobs, while the other layoffs will affect technical and office workers.
The job cuts are part of the company's efforts to focus on growth areas and meet lower customer demand for some legacy products, said AT&T.
The "economic impact and changing customer behavior" as a result of the COVID-19 pandemic were also drivers of the telecommunications giant's decision, AT&T said in a statement to Business Insider. The airline also said it eliminates more unpaid employees, many of whom are based outside the United States, than managers or union employees.
"As a result, in line with our previously announced transformation initiative, there will be a targeted but significant staff reduction among executives, managers and unionized employees," said AT&T.
The layoffs are taking place at a time of change for AT&T and the mobile communications industry as a whole. AT&T announced in April that Randall Stephenson will step down as CEO and be replaced by John Stankey, the company's President and Chief Operating Officer, who will take office on July 1. Stephenson will continue to serve as the Executive Chairman of the Board of Directors until January.
Stankey also described cost-cutting initiatives that included "staff rationalization" when speaking at a Morgan Stanley conference in March, Ars Technica reported at the time.
"Reducing our workforce is a difficult decision that we are not making lightly," said AT&T. "For employees who leave the company as part of these changes, we offer eligible employees severance pay and company-provided health insurance for up to to 6 months on. "
When it comes to closing shops, the pandemic has accelerated the carrier's existing plans to close some retail locations as customers' shopping habits shift to online. Most of the retail workers affected by the layoffs are being offered an alternative position within the company, AT&T said.
The company added that those who volunteer to leave, do not qualify for other positions within the company, or refuse another job within the company will receive severance pay.
The job cuts are due to the corona virus pandemic affecting the economy, leading to 2.3 million permanent job losses last month, according to the latest Bureau of Labor Statistics job report. However, the unemployment rate fell to 13.3% in May, from 14.7% in April, the highest level since the Great Depression, suggesting that the worst effects of the pandemic may be over.
"AT&T could help lead the country toward recovery by working with its people to build next-generation networks," said Chris Shelton, president of Communications Workers of America, in a press release. "Instead, the company is aggravating the pain of the ongoing recession."
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