In the recently released 2020 annual report, total employment declined by 17,040 compared to 2019. Employee separation charges totaled $1,177 million which resulted in a charge of ~ $69,000 per separated employee.
In contrast, employee count declined by 20,420 employees in 2019 compared to 2018. Employee separation charges totaled $624 million which resulted in a charge of ~ $31,000 per separated employee.
While these are net numbers and do not necessarily reflect the actual number of redundancies since new hires are not broken out, to me they reflect:
• The fact that the elimination of the post retirement health care subsidy was not as much of an incentive as management had hoped.
• The increasing separation expense is the reason for the effort by management to use benefit reductions rather than incentives to reduce headcount.
• The elimination of the pre-retirement subsidy may not be as effective as top management is hoping since employees seem to be much more reluctant to take the early separation bait expected by top management.
• A much greater effort is going to be required that is going to be much more expensive than top management is expecting to get headcount to a level that significantly helps reduce debt levels.
• Long tenured employees are going to be a lot more sticky than top management is expecting-
o 3-5 level managers are not going to leave due to the elimination of pre-retirement healthcare since it is a smaller part of their overall compensation and because they know their true market re-hire market value is zero.
o Why would 60+ year old 2-5 level managers leave when their potential health care subsidy benefits (after they must pay the monthly premiums) are good for less than five years compared to earnings well more than $100K+ for the next five years.
Because of their past stupidity, top management is going to have to dig the hole they dug a little deeper through increased employee separation expense before they can benefit from the reduction in employment levels as a method to reduce debt since they are deeply afraid of age discrimination class action lawsuits.
12 replies (most recent on top)
The elimination of the Medicare subsidy was not well publicized. I was not aware until mid-December 2020 that it was going to be eliminated, and by that time, it was too late for me to take action.
Contrast that with the elimination of the pre-Medicare subsidy, which is constantly being put in our face. I have even received messages to my personal email from AT&T Benefits offering to help me with my "big decision."
They are trying to make sure that nobody misses this news.
"How do you know if that's a fact if eligible employees have until the end of 2021 to decide if they want to leave? What am I missing?"
There are two separate medical subsidies in play. The first subsidy that was taken away was the medicare subsidy which was approx $2700/year while you are on medicare. Employees had to be off payrollby 12/31/20.
The current subsidy being taken away is the pre-medicare subsidy, which employees must be off payroll by 12/31/21. This is the medical subsidy that you receive after you leave AT&T up until you are on medicare.
So the comment was based on the folks who left by the end of 2020 to keep their medicare subsidy.
"The fact that the elimination of the post retirement health care subsidy was not as much of an incentive as management had hoped."
How do you know if that's a fact if eligible employees have until the end of 2021 to decide if they want to leave? What am I missing?
@1zjn+19YOSYXS Is right. Tax breaks for corporations, millionaires and billionaires didn’t stop layoffs. In fact there is a tax deduction for corporations to off shore. T will keep hitting that button either way. It’ll hit Stanky’s wallet but won’t save your job. Tax corporations and rich more and give the working people the tax cuts.
@ekd+19YOSYXS burped: "My bet is the biggest concern for employees going forward is that increase in taxes by Biden on corporations profits from 21% to somewhere north of that. "
Probably not, Skippy. I doubt employees give a wet slap about corporate tax levels any longer, especially considering that T celebrated the Florida Man's corporate tax break of 2018 by ... wait for it ... laying off tens of thousands of employees, even after Randy lied about how T would reinvest that money into more high-paying jobs.
At this point Stinkface might lie and say corporate tax rates are forcing layoffs, but history proves that would be just more T lies.
What a joke. If you are 60 and would have lived until 80, they just took $138,000 out of your pocket. Yet, you think they are going to do the right thing and give you a 6 month severance. Tell you what, I'll give you the same deal. Give me $100 and I'll give you $50. You should be happy, right?
they are NOT afraid of age discrimination class action lawsuits. They will always have a way of covering their azs.
I think you are mistaken about how many people are going to leave. I am thinking the number overall will be 15% of total AT&T management employee base. That will be a huge number.
Even with that, Stankey said if government increases taxes on corporations, they have to let more people go. He said may be that can be somehow balanced with a transportation bill that may motivate AT&T to keep a few of those people.
My bet is the biggest concern for employees going forward is that increase in taxes by Biden on corporations profits from 21% to somewhere north of that.
Seems clear at this point that they're never going to do it, but they could have gotten numbers they wanted had they simply done one enhanced severance offer, similar to what Verizon did.
It just sounds like you personally want them to increase the "employee separation" package so you can take it. It's kind of obvious when you say peoples re-hire value is zero. Not low, but zero. Sure, no job of any type at any pay level.
you also forgot to include that Randy retired and a lot of that separation pay went to just ONE person.
Agree. They knew they were going to cut the pre-medicare subsidy when they announced the post-medicare subsidy last year. So it begs the question, what are they not telling you about next year?