AT&T is considering a major plan of action to reduce billions of dollars in expenditures that will potentially render a big number of its workers without jobs.
The connectivity and entertainment conglomerate's objective is to generate billions of dollars in savings in the next three years via a a new cost-cutting measure that focuses on 10 strategic segments of the company, chief operating officer John Stankey said.
Stankey also disclosed the future of AT&T's DirecTV satellite offering, saying it will not be the main television service option they are pitching to most clients moving forward.
During an investor meeting, Stankey - the top honcho who is widely seen to be the next to take on the chief executive officer position - said the company is evaluating 10 key projects that they believe can generate "billions over a three-year planning cycle."
Around 70 percent of the categories each cover short-, mid-, and long-term goals. Stankey pointed out that short-term opportunities for the current year includes "benefit restructuring" and which is already happening.
One of the first of those 10 important measures will include workforce reductions, which Stankey described as "headcount rationalization," adding that AT&T has already been streamlining its personnel but said it is looking into "additional work" in that area.
For the so-called benefit restructuring, which is corporate jargon for lesser benefits and higher costs for staff, AT&T is also trying to trim down third party and supplier spending, Stankey told stakeholders.
As the company prepares to cut expenses, AT&T disclosed on Wednesday a fresh $4 billion fast-tracked stock buyback deal beginning in the second quarter of the year.
The deal is on top of a similar $4 billion buyback initiative in the current quarter. The Dallas, Texas-based firm said it plans to use 60 to 70 percent of free cash flow to retire around 70 percent of stocks it issued to support its Time Warner procurement by the end of the year.
AT&T cut its capital budget by over $1.6 billion last year, and expects a capital-investment reduction of more than $3 billion in the coming months. The company also slashed its workforce number from 268,220 to 247,800 in 2019, despite a guarantee to use a tax cut to provide new employment.
In addition to AT&T TV, which consolidates the convenience of online streaming with the hidden fees, and huge price hikes of cable, the company is hoping the upcoming HBO Max service will help place its video operations back on track.
