AT&T halts controversial stock buyback plan after pressure over job cuts

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AT&T has decided to halt the accelerated stock buyback program it previously planned. The company also appears to be trying to make up for the job cuts it carried out after promising to use President Trump’s tax cut to add jobs.

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Q4 2019 hedge fund letters, conferences and more

AT&T halts stock buyback plan

In a regulatory filing, AT&T said it had previously planned an accelerated stock buyback plan. The company had entered into an agreement for the plan with Morgan Stanley to buy back $4 billion worth of shares during the second quarter.

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However, AT&T said in order to maintain flexibility during the coronavirus pandemic, it has canceled the stock buyback plan. Instead, the company plans to "focus on continued investment in serving our customers, taking care of our employees and enhancing our network, including nationwide 5G."

"These continued investments will help ensure the Company is well positioned when the pandemic passes and economies begin to recovery," AT&T said in the regulatory filing.

After job cuts, AT&T boosts pay

AT&T received plenty of attention for cutting jobs last year, but this year, the company has announced that it's temporarily raising the pay of employees on the front line of the coronavirus crisis. Effective today, the company will pay a 20% bonus above employees' regular hourly base rate.

Specifically, that higher pay is for union employees who work in retail stores and call centers. Field technicians who are part of a union will also receive the higher pay. About 40% of AT&T's employees are affiliated with a labor union, which means nearly 100,000 of its 246,000 employees should be eligible for the higher pay rate.

In an interview with CNN earlier this week, AT&T CEO Randall Stephenson called the coronavirus pandemic "a time of war." He said companies should step up and help the general public deal with the economic fallout from the virus.

AT&T received flak earlier this year after it was revealed that the company has cut nearly 38,000 jobs since the Tax Cuts and Jobs Act went into effect two years ago. During the fourth quarter of 2019, the company eliminated more than 4,000 jobs. It promised to add 7,000 jobs using the money it saved due to the tax cut. The company also boosted Stephenson's pay while cutting jobs.