U.S. Workers Can't Afford Another Telecom Merger: MADCo Fact Sheet

AT&T is seeking approval from federal regulators to purchase competitive wireless carrier T-Mobile.  But mergers in the telecom industry over the last decade are likely to have cost tens of thousands of workers their jobs. Not every lost job at telecom carriers was a result of mergers, but the record shows that even as these companies get bigger, workers aren’t benefiting.  The American economy – and its workers – can’t afford a merger between AT&T and T-Mobile. 

AT&T Mergers in 2005 – 2006 May Have Cost Up To 30,000 Jobs

In 2005, SBC purchased AT&T Corp. and re-named the new combined company AT&T Inc.  The next year, AT&T Inc. purchased BellSouth, which also gave it complete control of Cingular Wireless.  Before this merger-mania, the companies employed 337,300 workers.  But the new, merged AT&T Inc. had only 304,180 workers in 2007.  That means as many as 33,120 workers were out of a job in the year following the mergers.

AT&T Continued to Shed Jobs Through 2010 Despite Profit

AT&T Inc. continued to reduce its workforce in the years after the mergers were completed.  In 2010, the company reported only 266,590 workers, which is 42,460 fewer jobs than the company’s highest reported employment levels of 2007.  During this same period of time, AT&T reported $46.4 billion in profit.  These job losses occurred while the company also spent more than $21 billion upgrading its network.  The tens of billions of dollars AT&T spent on its network did not prevent it from eliminating tens of thousands of jobs, while investors and company executives benefited from the billions in profit the company continued to make.

Verizon Mergers and Acquisitions Were Bad News for Workers

In 2000, Bell Atlantic and GTE merged and formed Verizon.  A few years later Verizon purchased MCI, which had 40,000 workers, then acquired Alltel in 2008, which had 16,104 workers. Before merging, these companies employed a combined 300,104 workers.  But today, Verizon only employs 194,400 workers, or 105,704 fewer people employed.  Meanwhile, Verizon earned $20.9 billion in profit between 2006 and 2010.

AT&T Says T-Mobile Merger Will Create $40b in “Synergies”

In pitching the merger to investors and others, AT&T has estimated the merger will create $40 billion in “synergies,” such as duplicative call centers, retail centers, advertising, and so on.   Eliminating those redundancies could cost tens of thousands of jobs at a time when the American economy is still struggling to recover. 

More mergers do not mean more jobs. As the president of the American Antitrust Institute noted, “I’ve never seen a merger that has produced new jobs.”