Report Says AT&T’s Cheap Contracted Labor Puts the Public at Risk

Despite billions in tax breaks and subsidies, AT&T’s firing thousands and replacing them with a 'messy web' of 'irresponsible contractors,' union report says.
October 5, 2020, 6:05pm
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Image: Tim Boyle/Newsmakers/Getty Images

Despite billions in tax cuts and subsidies, AT&T keeps laying off union workers by the thousands, replacing them with substandard contract labor that poses a threat to worker and public safety, according to a new report from the U.S. telecom industry’s biggest union.

In order to grab a $42 billion tax break from the Trump administration in 2017, AT&T promised thousands of new jobs and a massive spike in network investment. Instead, according to the Communications Workers Of America, AT&T trimmed its network investment by billions of dollars, and fired more than 41,000 employees in the last three years alone. 

A new Communications Workers Of America (CWA) report claims this predominantly unionized workforce was replaced by a “messy web” of more than 700 discount contractors who’ve been repeatedly cited by local governments for shoddy work and safety violations.

“The result is a disturbing record of accidents that cause damage to utilities, public property, and homes while presenting serious risks to worker and public safety,” the CWA said.

The report cites numerous examples of AT&T contractors and subcontractors failing to adequately bury fiber lines, accidentally rupturing gas lines, damaging customer property, causing internet and power outages, starting fires, or ignoring safety protocols resulting in injury. 

AT&T did not respond to a request for comment. 

The report included a survey of 1,500 AT&T employees, 96 percent of which say such contractors actually raise costs by requiring employees fix or redo poor-quality work. 81 percent of AT&T employees surveyed said that contracted labor resulted in higher overall costs for consumers, and 57 percent said shoddy contracted work resulted in safety risks to the public.

The study also quoted anonymous AT&T contractors themselves, who complain the company has created a cut-throat environment where cutting corners is essential to secure AT&T contracts, with safety and employee pay usually the first casualties.

“We refuse to do work for AT&T or their turfing contractors,” said one contractor. “They want all the money to ‘manage’ the projects and the people who are actually doing the install get little to nothing.”

“AT&T is a bully,” said another. “They used to be the best company to do work for. Gradually they became the leaders of the ‘I’ll pay you later and if you don’t like it we will get someone else’ bunch.”

The CWA’s complaints aren’t unique. A 2012 report by ProPublica showcased how relentless pressure to cut costs by using contract labor resulted in a notable spike in tower climbing fatalities as AT&T rushed to upgrade its wireless network. From 2003 to 2011, AT&T had more fatalities on its jobs than its three closest competitors combined, ProPublica found.

AT&T isn’t the only company that has found itself routinely criticized for using lower-quality contract labor. Comcast spent decades under fire for contractors accused of falling asleep in people’s homes, rupturing gas lines, causing fires, and even torturing kittens.

Cheap contract work not only costs telecom monopolies less money, but using a tangled web of contracted and subcontracted work traditionally helps companies avoid liability for safety violations by creating a tangled web of legal accountability.

Meanwhile employees continue to pay the price for AT&T’s financial headaches, most of which were self-inflicted. AT&T spent $150 billion to acquire DirecTV (2015) and Time Warner (2018) to dominate TV and video advertising. Instead, the mergers saddled AT&T with a mountain of debt it then attempted to extract from its customers in the form of repeated price hikes.

In turn, AT&T TV customers have been leaving the company in record numbers. The debt also resulted in backlash from major AT&T investors like Elliott Management Corp., which questioned the company’s relentless focus on mergers and urged the company to lay off even more workers to compensate for the massive debt load. 

AT&T’s subsequent layoffs and cost cutting comes despite not only billions in tax breaks, but billions more in regulatory favors (like killing net neutrality) and taxpayer subsidies. Last week, AT&T was accused by Mississippi regulators of taking $280 million in taxpayer subsidies for a wireless network expansion the state says was never completed.

A ProPublica report last week noted that AT&T also increasingly uses contracted workers for customer support, some of which were paid as little as $96 for three weeks of work. 

The CWA urged AT&T to discontinue its reliance on “irresponsible contractors,” and urged the passage of the Moving Forward Act, which prohibits recipients of federal broadband subsidies from outsourcing to evade union contracts.