Community Workers of Americans Union (CWA) says implementation of the recommendations of the investor – Elliott Management Corp at AT&T Inc. (NYSE:T) would result in 30,000 job losses. More job cuts will come from the closure of the retail locations and divestiture of landline business and DirecTV if AT&T moves forward with Elliott’s recommendations. CWA represents over 100,000 employees of AT&T.
Elliot holds a position of $3.2 billion in AT&T
According to the disclosure in September 2019, Elliott holds a position of $3.2 billion in AT&T. The hedge fund submitted a proposal to increase the share value of AT&T by up to 50% through cost measures and closing/ divesting some businesses. Elliott could push through to implement its plan though AT&T says no to sell DirecTV.
Elliot to indulge in a proxy war
According to the president of CWA, Christopher Shelton, Elliott, the hedge fund, could engage in a proxy war at the board to ensure the implementation of its proposal. CWA would not allow the implementation of the plan because 30,000 employees would lose their jobs. The Teamsters Union, which represents 1.4 million workers, expressed solidarity with CWA on Wednesday.
The International Brotherhood of Electrical Workers and CWA represent 10,000 workers in DirecTV. Assistant Director (Research) at CWA, Nell Geiser, said the sale of DirecTV would cause job losses in call centers, and tech support centers, and home installation departments.
The jobs of 11,000 people, who support the landline business of AT&T, could be affected if Elliott succeeds in implementing its proposal. Workers of AT&T’s rural landline business would be at risk of losing their jobs.
According to CWA, if AT&T follows Verizon in matching the third-party operated branded stores, AT&T needs to shutdown 970 corporate locations. The move would result in job losses of 8,500 workers engaged in retail sales.
The proposed sale of AT&T operations in the Virgin Islands, and Puerto Rico to Liberty Latin America Ltd would result in job loss for 900 workers. Elizabeth Warren, the presidential candidate, instructed AT&T to reject the proposal of Elliott because it could cost the jobs of workers.
AT&T is negotiating with the management of Elliott to resolve the issue. The discussions include some changes that include the spinning or sales of some assets to improve margins. It could also change the board members.