March 29, 2024

DealBook: AT&T Plans to Bring Back Jobs Sent Abroad

Randall Stephenson, ATT's chief, at a House hearing in May. He hopes to allay some concerns.Andrew Harrer/Bloomberg NewsRandall Stephenson, ATT’s chief, at a House hearing in May. He hopes to allay some concerns about the T-Mobile deal.

ATT, its $39 billion deal to buy T-Mobile USA under pressure from multiple fronts, is now seeking to promote one benefit of the blockbuster deal: jobs.

The company plans to announce on Wednesday that it will bring back 5,000 call-center jobs that were outsourced abroad. ATT also plans to commit to maintaining its and T-Mobile’s more than 25,000 call-center jobs in the United States.

ATT’s move — which the company describes as one of the biggest job repatriations since the financial crisis — is meant in part to assuage critical lawmakers’ fears of possible job cuts. In a letter to the two federal regulators reviewing the deal, Senator Al Franken, Democrat of Minnesota, wrote that “it is fair to assume that layoffs constitute a substantial portion” of the deal’s promised cost savings.

Other politicians, including Representatives Ed Markey of Massachusetts and John Conyers of Michigan, have also expressed unease over the proposed merger’s effect on jobs.

“Does this shore up an issue that people have?” Randall Stephenson, ATT’s chief executive, said in an interview on Tuesday. “Sure, I hope it does.”

Among the chief attractions of mergers is cutting costs, and ATT has forecast roughly $3 billion a year in savings. The telecommunications giant has said that it plans to create jobs by building out the combined company’s next-generation wireless network, an effort that is expected to cost more than $8 billion, though it is also expected to shutter hundreds of retail stores and other back-office positions.

But Mr. Stephenson said that as ATT was reviewing its and T-Mobile’s businesses, creating jobs in the United States became a way to create good will. The company had about 265,410 employees as of Jan. 31. T-Mobile, now a unit of Deutsche Telekom, employs about 42,000 in the United States.

“As I sit here and watch the news over the last month, I can’t help but ask, ‘What else can we do?’ ” he said. “This sends a good message to the U.S. and to the labor markets.”

ATT currently operates about 55 call centers throughout the country, while T-Mobile runs about 24. Mr. Stephenson said that his company had yet to determine where the new call-center jobs would be located. The existing call centers are in many locations around the country, including T-Mobile’s headquarters in Washington and ATT’s home in Texas, as well as in Pennsylvania and Maine.

Mr. Stephenson added that he had become comfortable that ATT would still meet its projected cost savings despite the move.

Jobs are not the only concern on skeptics’ minds about ATT’s planned mega-deal. Since it was announced in March, the proposed acquisition has taken fire from competitors like Sprint, consumer groups and federal and state lawmakers worried about combining two of the nation’s biggest cellphone service providers.

ATT has its supporters, including telecommunications workers’ unions, technology companies like Microsoft and Facebook and 27 governors. The company has also made a big lobbying effort to drum up additional backing.

Both sides have raced to put pressure on the federal regulators scrutinizing the deal, the Federal Communications Commission and the Justice Department. Several state regulators, including California’s public utilities commission, are also closely examining the merger.

Last month, the F.C.C. halted its review of the deal to examine ATT’s economic models supporting the deal, though it resumed the process last week.

The company took additional criticism after a briefly unredacted submission to the F.C.C. showed that ATT had projected spending just $3.8 billion to expand its nascent 4G wireless network nationwide, far less than the $39 billion it is spending to buy T-Mobile.

Mr. Stephenson countered that expanding its network without T-Mobile’s customer base, spectrum and cellular towers had “no business case.”

He added that he still expected the deal to receive approval by the end of the first quarter next year.

“Nothing has transpired to date that would make me think that will change,” he said.

Article source: http://feeds.nytimes.com/click.phdo?i=cacda9d77698122e0eae8eadf9d741e4

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