AT&T Inc. (NYSE:T) announced plans to cut more than 3,000 jobs and close 250 stores. Although the company is yet to confirm the exact number of jobs affected, around 3,400 jobs, clerical jobs, technician, and managerial and executive roles, will be affected.
In addition to job cuts, the company will close 250 retail stores, among them the AT&T and Cricket Wireless branded stores. According to the company, the move has been necessitated by changes in customer behavior in addition to economic impact of the COVID-19 pandemic. AT&T is facing difficult times in the market after T-Mobile merged with Sprint.
AT&T planned to close the stores, but the move has been moved forward by the pandemic. The company noted that more customers are shopping online, a move that has significantly reduced business for brick and mortar stores. All workers that will be laid off will get severance pay and up to six months of health care from the company.
Majority of its workers have already transitioned towards customer support roles, and many stores closed due to COVID-19 pandemic. AT&T has announced that most of its wireline technician redundancies are voluntary and is working on a severance package for these employees.
Phone stores are closing the entire world. Dixons Carphone, a UK-based company, has announced plans to close its 531 Carphone Warehouse locations. Dixons is the largest chain of phone stores in the UK. The company says the move has been necessitated by changes in customer habits and a significant drop in the number of people replacing their phones. Many people are buying phones separately or as part of flexible bundles.
AT&T has undertaken massive acquisitions
AT&T, under the outgoing CEO Stephenson, has undertaken several acquisitions, including satellite TV major DirecTV and media giant Time Warner. The acquisition left the company under huge debt. In addition, AT&T’s satellite TV subscribers have plummeted significantly. In a bid to lower its debt burden, Elliott pushed AT&T to divest these assets. The company also added to its debt by taking out a new $5.5 billion loan in April.