'Something Only a Hedge Fund Manager Could Love': Union Trashes AT&T Plan to Boost Assets With Stock Buybacks

The Communications Workers of America on Monday sharply criticized AT&T after the company released a new three-year plan to appease its vulture fund shareholder.

"The plan that AT&T announced today is something only a hedge fund manager could love."
--Chris Shelton, CWA

"The plan that AT&T announced today is something only a hedge fund manager could love," said Chris Shelton, president of Communications Workers of America (CWA), the company's major union.

The announcement comes a month after vulture fund Elliott Management, run by billionaire Paul Singer, announced a $3.2 billion stake in the telecommunications giant.

The new plan was crafted to address debt concerns. As The Vergereported,

AT&T's TV business took an enormous hit last quarter, losing nearly 1.4 million subscribers--an increase of around 1 million from the same quarter the prior year. Both sides of AT&T's TV business were to blame: AT&T TV Now, the company's streaming service, has been losing subscribers since the end of 2018, while AT&T's traditional TV services saw already large losses grow by more than 3x year over year.

"The objectives we have outlined today have been central to our plans for many months, even before we closed our acquisition of Time Warner," AT&T chairman and CEO Randall Stephenson said in a statement. "But, as you would expect, our thinking has also benefited from our engagement with our owners, including Elliott Management."

Part of plan, as Reuterslaid out, includes "selling up to $10 billion worth of businesses next year, paying off all its debt from the purchase of Time Warner, and adding two new board members." AT&T also said it was "committed to buying back stock, adding two new directors, and reviewing its portfolio."

The stock buybacks--a practice that has increased since the 2017 GOP "tax scam"--drew particular ire from CWA.

Echoing concerns from other critics, CWA said the buybacks do nothing but fatten the pockets of already wealthy shareholders.

"Instead of using its massive profits to increase investment in next generation wireless and fiber broadband networks and train its employees for jobs of the future, AT&T plans to spend $30 billion buying back its own stock to boost share prices," said Shelton.

"Our union will continue to oppose Paul Singer's agenda and keep a close eye as AT&T conducts its portfolio review," he added. "And we will continue to do what we've always done: fight back against corporate greed by standing up to protect good jobs at the bargaining table and, when necessary, on the strike line."