AT&T Inc. (NYSE:T)’s President and Chief Operating Officer John Stankey announced yesterday that the company would purchase another $4 billion in stock buybacks next quarter, in addition to the $4 billion the company repurchased this quarter. These massive stock buybacks come as contract bargaining opened last week for more than 13,000 Communications Workers of America (CWA)-represented AT&T West workers and AT&T’s Q4 earnings report showed the company with record operating and free cash flow of $48.7 billion, up nearly 12 percent for 2019.
Meanwhile, the District 9 bargaining team is urging the company to negotiate an improved contract that includes wage increases, benefit protections and a commitment to keeping good, family-supporting jobs in the region. The current contract expires on April 4 and covers wireline technicians and customer service representatives in California and Nevada.
“AT&T’s announcement of more stock buybacks is an affront to the thousands of workers going through contract negotiations because it shows the company’s primary concern is pandering to wealthy hedge fund managers,” said CWA District 9 Vice President Frank Arce. “To remain competitive, AT&T needs to be building next-generation networks everywhere people need service, not jacking up the stock price through stock buybacks. Workers are ready to lead AT&T into the future, and the company needs to invest in our communities and us for that to happen.”
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Since the Tax Cuts and Jobs Act (TCJA) went into effect in 2018, and despite record-breaking profits, AT&T has cut over 37,000 jobs, including 4,040 in the fourth quarter of 2019. Capital expenditures declined by more than $1 billion in 2019 as compared to 2018. Company workers and union members are disappointed by the company’s lack of investment in its workforce and its broken promises, including the pledge made by AT&T’s CEO Randall Stephenson to create 7,000 new jobs if President Trump’s corporate tax cuts passed. AT&T also announced plans by the end of 2022 to use between 50% and 70% of its free cash flow to buy back 70% of the stocks the company issued to purchase TimeWarner.
AT&T has continued to cater to the demands of controversial vulture hedge fund Elliott Management, which purchased a small stake in AT&T in September 2019. Elliott is pushing AT&T to extract profits from the company by eliminating jobs, outsourcing work, and divesting critical assets.
Elliott has also won a commitment from AT&T to spend $30 billion on stock buybacks, which will drive up its share price to enrich a small group of wealthy investors, leaving fewer resources for building next generation wireless and fiber broadband networks and training workers for the jobs of the future. Credit-rating agency Moody’s has raised concerns that the large cost of the stock buyback plan puts AT&T at risk for a credit downgrade.