Tax cuts result in big profits for AT&T, workers get layoffs and concession demands

At an annual Tax Day demonstration in Washington DC, the Communication Workers of America (CWA) criticized the corporate tax cuts passed in December.

Union leaders said that the tax cut produced billions of windfall profits for corporate giants like AT&T and gave them incentives to offshore and outsource good paying, working class jobs.

AT&T CEO Randall Stephenson was an enthusiastic supporter of the tax cuts, which have proven to be especially good for the company.

AT&T reported a $29.5 billion profit in 2017, a 126 percent increase over 2016 when the company reported $13 billion in profits.

The tax cut was a big reason for AT&T’s enormous profits.

Morningstar reports that “the corporate-tax overhaul, a long held goal of Chief Executive Randall Stephenson, helped AT&T book a $19 billion profit in the fourth quarter (of 2017), though its revenues slipped by 0.4 percent.”

Shortly after the tax bill passed in December, Stephenson promised that the company would invest its savings to create thousands of new jobs, but four days later on Christmas Eve, AT&T notified workers that it was eliminating thousands of jobs across the US.

One of the workers who received a layoff notice was Merle Milton, CWA Local 4004 president in Detroit.

AT&T told Milton and 114 other union employees at its Detroit call center that it was closing the call center and laying off the workers. Earlier in 2017, AT&T closed another Detroit call center eliminating 53 union jobs.

“This December, AT&T announced that they were closing the call center where I’ve worked for 25 years,” Milton said. “My co-workers and I worked hard to provide quality customer service and help grow AT&T into the successful company it is today. But instead of rewarding us for our dedication, AT&T is pulling out of our community and taking our jobs overseas–undermining customer service and hurting hardworking families. Workers deserve better, AT&T customers deserve better, and cities like Detroit deserve better.”

Milton and the Detroit workers weren’t alone.

Larry Robbins, vice president of CWA Local 4900, told the Indianapolis Star that, “we believe there’s more than 4,000 people AT&T has (notified of layoffs) across the country.”

CWA said that many of these lost jobs are being sent overseas where workers are “paid pennies on the dollar relative to call center workers in the US,” and it appears that the new tax law is facilitating these job losses.

A recently released report by the Congressional Budget Office  (CBO) says that the new tax code gives tax breaks to companies that offshore tangible assets. Tangible assets include things such as factories, office buildings, and call centers.

Doing so, states the CBO, “may increase corporations’ incentives to locate tangible assets abroad.”

CWA is supporting legislation to end tax breaks that encourage companies to shift jobs overseas.

The bill titled the “No Tax Breaks for Outsourcing Act” is sponsored by Rep. Lloyd Doggett of Texas and Sen. Sheldon Whitehouse  of Rhode Island.

Those that still have jobs at AT&T have found that the company is acting as if it were in financial trouble rather than flush with tax-cut cash.

AT&T is seeking concessions as it negotiates a new collective bargaining agreements with two of its bargaining units–AT&T Midwest and AT&T Legacy T.

The company is demanding what the union calls “unprecedented” increases to workers’ health care costs, weaker pension benefits, and more outsourcing of union jobs.

Lisa Bolton, CWA’s vice president for telecommunications and technologies called AT&T’s concession demands “insulting.”

“AT&T made nearly $30 billion in profits last year, and is reaping major benefits from the passage of the corporate tax cut bill,” Bolton said. “They can afford to keep good family supporting jobs in our communities instead of laying off workers and sending their work to low-wage contractors.”

The two contracts that cover 14,000 workers have expired, but the union and company continue to negotiate.

Workers at the two bargaining units have authorized a strike if the two sides can’t reach a fair agreement.

“Our members remember the big promises that AT&T CEO Randall Stephenson made if the corporate tax cut bill passed, and now we’re holding AT&T to those promises,” said CWA District 4 Vice President Linda L. Hinton. “AT&T should not underestimate CWA members. They are ready to do whatever it takes to get a fair contract. . . , including going on strike if we aren’t able to make progress at the bargaining table.”

 

 

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