AT&T “Trump Bonuses” Look Small Compared to Layoffs, Rate Hikes

AT&T helped Donald Trump propagandize his tax bill this week, claiming some connection between the big corporate tax cuts and the $1,000 bonuses the company is giving to 200,000 U.S. employees. There’s a more likely connection between the timing politically useful timing of the announcement and AT&T’s desire to get Trump off its back over its proposed merger with Time Warner.

But let’s put AT&T’s bonuses in context.

First off, AT&T will be able to cover half of those bonuses by payroll savings accruing from the thousand-plus workers it is laying off:

Meanwhile, however, a slew of AT&T layoffs nationwide looks poised to claim casualties running into the thousands. As The Post reported this week, AT&T fired more than 700 cable installers earlier this month.

Elsewhere, sources said AT&T has lately laid off 215 high-skilled technician jobs in nine Southern states. Those jobs, many paying $36 an hour, will be eliminated in the first quarter, sources said.

“It just seems funny that if they are going to create 7,000 jobs, why it is necessary to lay off 215 Southeast workers?” one of the skilled technicians griped to The Post.

Add to that 280 jobs that will be cut beginning Feb. 17 at AT&T’s Dallas credit and collections center, a source to AT&T confirmed. Also in February,  278 jobs will be cut at AT&T’s El Paso, Texas call center. Yet another 87 positions will be scaled back at the company’s Kansas City, Mo. credit and collections center, according to the source.

AT&T also fired an undisclosed number of workers in November at its Atlanta-based entertainment wireless group, a worker said.

This smattering of layoffs alone — likely only part of the looming bloodbath, according to sources — could save AT&T as much as $100 million [Josh Kosman, “AT&T Boss Touts Big Employee Bonuses Amid Job Cuts,” New York Post, 2017.12.22].

Some of those laid-off workers do still get the Christmas bonus. Ho ho ho.

AT&T will also cover those bonuses by increasing rates for DirecTV:

DirecTV, in a notice on its customer-support site, said monthly rates will increase on Jan. 21, 2018, for all programming tiers starting with Select packages (unless customers currently have discounted promo pricing).

DirecTV’s Select package will go up $2 per month (up 2.6% over current standard pricing of $76 per month); while Entertainment is increasing $3 (3.4%); Choice will be $4 higher (4%); Xtra will rise $7 (6.4%); and Ultimate and Premier tiers will increase $8 (6.7% and 4.6%, respectively) [Todd Spangler, “Comcast, DirecTV, Dish, Charter Set Rate Hikes for 2018,” Variety, 2017.12.22].

I don’t know how many people subscribe to each service, but if AT&T can make $3 more per month off each customer, and if they can hang onto their 25 million DirecTV customers, they can cover all $200 million in bonuses with less than three months of revenue just from those rate hikes.

And not that I would sneeze at a $1,000 bonus, but one HR survey says AT&T is under-stuffing its employees’ stockings:

In the latest sign of a booming economy, human resources officers from some 500 corporations anticipate a massive 66 increase in cash Christmas bonuses, added to a big surge in gifts and parties for American workers.

New data to Secrets from Accounting Principals said the “average bonus” will jump from $1,081 last year to $1,797 [Paul Bedard, “Boom: Christmas Bonuses to Jump 66%, to $1,797,” Washington Examiner, 2017.11.22].

Note that report is from November, pre-Trump Tax. The economic factors justifying bigger boni (gotta do the plural at least once) were already in the chute before the corporate tax cuts hit.

Finally, AT&T also announced this week that shareholders will get a 2% dividend bump, the company’s 34th consecutive annual dividend increase. An extra penny on 6.1 billion outstanding shares means $61 million for stockholders.

But for the millions AT&T and friends are touting as Trump-driven employee benefits, corporate America is spending billions more to reward its faithful stockholders:

Following are the share buyback and dividend announcements made by U.S. companies since the essence of the tax bill was agreed :

• Boeing raises dividend by 20 pct to $1.71 per share and establishes new $18 billion repurchase program; the world’s biggest maker of jetliners in October reported third-quarter earnings of $3.06 per share.
• Honeywell board authorizes repurchase of up to $8 billion of common stock.
• Trinity Industries increases share repurchase authorization to $500 mln from $250 mln over two years.
• Veeco authorizes $100 million share repurchase program.
• Fortune Brands increases quarterly dividend 11 percent to $0.20 per share and authorizes $250 million share buyback
• Morningstar Inc authorizes new $500 million share repurchase program and increases quarterly dividend 8.7 percent to $0.25 per share
• MSG Networks announces $150 mln stock repurchase program
• Bristol-Myers Squibb raises its quarterly dividend by 2.6 percent
• Anthem Inc increases share buyback program by $5 billion
• United Airlines unveils $3 billion share repurchase program
• Home Depot sets $15 bln share buyback, investment plan
• Stryker Corp boosts quarterly dividend per share by 11 percent
• Owens Corning raises dividend payout per share by 5 percent
• Edwards Lifesciences Corp approves new $1 billion share repurchase program
• Bank of America plans to repurchase additional $5 billion in common stock by June 30
• T-Mobile​ USA announces $1.5 billion buyback
• Mastercard board approves 25 percent raise in quarterly dividend, authorizes buyback of up to $4 billion of Class A stock
• Kinder Morgan says still expects increase in dividend to $1.00 per share in 2019 and $1.25 per share in 2020. The company stated in its Q2 results, it expects to raise dividend to $0.80 per share in 2018, $0.20 per share in Q1
• TE Connectivity approves additional $1.5 billion share repurchase and increases quarterly dividend to $0.44 per share from $0.40 per share
• Dover Corp sees share repurchases of $1 billion in 2018
• American Tower to repurchase up to $2.0 billion of common stock
• Ciena announces $300 million share repurchase authorization
• Dollar General reiterates forecast for share repurchases for fiscal 2017 at about $450 mln
• SG Networks Inc announces $150 million stock repurchase program [Suhail Hassan Bhat, “U.S. Corporate Buybacks, Dividends Since Tax Bill Vote,” Reuters, 2012.12.12].

Don’t let the corporate PR machines fool you. These bonuses were in the chute, driven by the growing Obama economy. The heart of the Trump Tax is more handouts to corporate America that won’t trickle down any more than past tax cuts did. The rich will get richer, and the rest of us will fall further and further behind… and pay more for our cable TV.