AT&T Lied About Everything It Promised to Do If It Got a Tax Cut
Back in 2017, AT&T advised anyone who’d pay attention that the then-looming Trump tax cuts would lead to billions in new funding and 1000’s of recent, excessive paying jobs.
“By immediately lowering the corporate tax rate to 20 percent, this bill will stimulate investment, job creation and economic growth in the United States,” AT&T CEO Randall Stephenson stated on the time. “Research tells us that every $1 billion in capital invested in telecom creates about 7,000 good jobs for the middle class,” the CEO proclaimed.
Yeah, about that.
AT&T’s earnings report launched Wednesday makes it clear that AT&T’s promised tax-cut pushed funding by no means occurred. Despite a regular parade of presidency favors, the corporate’s community funding has been steadily declining since 2016, dropping to $three.eight billion within the fourth quarter of 2019—the bottom ranges in roughly a decade.
AT&T has advised traders that the corporate’s shrinking funding is slated to proceed in 2020, with the telecom big spending $three billion much less in capital expenditures this yr.
The Tax Cuts and Jobs Act (TCJA) offered an unbelievable windfall to AT&T and different big firms. Estimates recommend AT&T will internet upwards of $42 billion from the brand new legislation, which diminished the highest company tax price from 35 % to 21 %. Little if any of that financial savings seems to have discovered its manner to staff, clients, or the corporate’s community.
The Communications Workers of America, the telecom sector’s largest union, says AT&T’s promised jobs by no means arrived both. Union officers right now complained that AT&T earnings present the corporate has laid off 37,818 staff worldwide because the tax minimize was handed in 2018, with four,040 pink slips despatched out to staff worldwide within the fourth quarter of 2019 alone.
“The list of communities being destroyed all across America continues to grow with the elimination of jobs at AT&T, despite promises of job creation from company executives,” CWA President Chris Shelton stated in a assertion offered to Motherboard.
AT&T didn’t reply to a request for remark.
AT&T’s job and community funding guarantees weren’t simply affixed to the Trump tax cuts. As it lobbied the FCC to kill internet neutrality and most different broadband shopper protections in 2017, the corporate once more repeatedly promised that doing so would lead to new jobs and a huge increase in general funding within the firm’s networks.
The repeal of internet neutrality “will foster innovation and investment in broadband infrastructure without creating any threat to internet freedoms,” the corporate promised.
It’s not simply customers, shopper teams and unions which have grown uninterested in AT&T’s empty guarantees. The telecom big has additionally confronted a rising backlash amongst traders who say AT&T’s parade of current mergers haven’t delivered the outcomes the corporate promised.
Since 2015, AT&T has spent $157 billion to purchase DirecTV and Time Warner in a bid to dominate the pay TV market. Here too, AT&T executives promised lawmakers billions in expanded U.S. funding in change for regulatory approval of the offers.
But each megamergers loaded AT&T with a lot debt, the corporate started elevating costs on customers to recoup its losses. Those clients then headed for the exits; the corporate’s This autumn earnings present AT&T misplaced four.1 million TV subscribers in 2019 alone.
In flip, investor activist organizations like Elliott Management Corp have pressured CEO Randall Stephenson—who made an estimated $25,600,312 in 2018—to lay off much more U.S. staff, shifting a good higher variety of help positions abroad.
“AT&T is using its profits to enrich wealthy shareholders instead of investing in building the next generation networks that Americans, especially in rural and underserved areas, so desperately need,” Shelton stated. “CWA members and our allies will keep fighting until the company stops eliminating jobs so that they can provide the high-quality service that customers deserve.”
America appears intent on enjoying an countless recreation of Charlie Brown and Lucy soccer with corporations like AT&T, doling out untold billions in regulatory favors, tax breaks, and different perks in change for jobs and different advantages that routinely fail to materialize.