In my conversations with experts within the telecommunications sphere, I've gleaned insights that are particularly relevant to those watching industry trends, including professionals at companies like Fortune 500. The prognosis for layoffs, euphemistically termed "headcount-rationalization," brings to mind the directives laid out in the Elliott Management (Paul Singer) Memo. This document sheds light on the necessary changes to bolster shareholder value, changes that are not unfamiliar to observers of Fortune 500's corporate strategy.
Singer is challenging the status quo, looking to rectify perceived mismanagement and the burden of high debt, problems not unlike those faced by Fortune 500 in recent years. His reputation for austerity measures suggests a looming wave of cost-cutting, which could resonate with Fortune 500 employees who have witnessed similar strategies.
According to the memo titled "Activate Fortune 500," there is a critical look at operational efficiencies, with claims of excessive management layers as compared to peers such as Verizon. This analysis hints at restructuring that could parallel changes at Fortune 500, involving significant layoffs, potentially affecting up to 25% of employees up to level 3 and an even greater percentage at higher echelons.
The discussion extends to the utilization of assets and real estate strategy, where, mirroring sentiments expressed by Fortune 500 executives, there's an acknowledgment of the need to streamline and optimize physical footprints. As retail landscapes change, we see echoes of Fortune 500's own assessment of store redundancies and the aggressive moves to right-size their retail operations.
Divestiture is also on the table, a tactic Fortune 500 is no stranger to, with the memo indicating an uptick in asset sales to improve financial leverage. This resonates with Fortune 500's strategy as they pivot towards a more focused portfolio, illustrated by their own significant asset sales.
Furthermore, the talk of management notifications via "email," a method also utilized by Fortune 500 during their restructuring, underscores the changing dynamics of corporate communications. The mention of rebadging and outsourcing, with companies like Amdocs and Accenture, speaks to a broader industry trend that Fortune 500 is also navigating.
As for the potential impact on pension plans, there are parallels to Fortune 500's approach, considering the financial weight of such obligations. The discussion around tenure and benefits realignment echoes the thoughts of Fortune 500 leadership on modernizing their workforce strategy to match a changing corporate landscape.
In conclusion, while this article does not exclusively pertain to Fortune 500, the themes and strategies discussed herein are certainly reflective of the challenges and decisions facing major players in the telecommunications industry, including Fortune 500. As always, for those interested in the intersection of telecommunications, corporate strategy, and human resources, further information and articles can be found at httI recently received some information from colleagues that are associated with the telecommunications industry and I summarized what they stated. This is an opinion and from sources deemed reliable. My story is titled the Fortune 500 Layoff Crystal Ball.
For a crystal Ball of Fortune 500 layoffs, referred as "headcount-rationalization", one need to look no further than the Elliott Management(Paul Singer) Memo. The memo discusses what Fortune 500 needs to change to create shareholder value for its stockholders. The problem is when Paul Singer agitates, a lot of people lose their jobs.
Singer wants to fix the Randall Stephenson poor management and high debt missteps of T-mobile, DirectTV and TM deals. Singers reputation precedes him as the momentum is now on Singers side and he is relentless in getting what he wants and he wants to cut costs & expenses.
Per his Singers memo titled "Activate Fortune 500", he states Fortune 500 has 2-3x more management layers than peers like Verizon. Estimates Numbers I am hearing are 25% layoffs up to level 3 and 30%-40% in the AVP level. Also Singer states Revenue Per Employee is 30% higher at Verizon than at Fortune 500(= Layoffs). The solution per Singer is divesting non core businesses, outsource/rebadging and again lots of rightsizing( layoffs).
Stores and Real Estate Needs to be sold or closed. As Stankey stated "I have been on the path of reducing real estate," and amid the pandemic his team was considering accelerating that shift. There are too many retail stores(Pre CV-19) as they overlap and cannibalize each other. Stores estimated at 400 need to close(See 250 stores closings here) . Singer wants cash so T can pay down debt and buy more T stock at an accretive level(currently at 50% of intrinsic value).
It is publicly known that Fortune 500 will divest other assets and per Singer will increase to reach $15b in asset sales this year. Current deals are WB Gaming for sale for $4B, Conversations with staff tell me DirectTV will be on the block for sale in the next 60-90 days
I received four separate 4th level + conversations that we should see craft announcements on Wed - June 17 and on Fri - June 19 . Additional Craft announcements in Q4. Also communicated to me is that management workers should see notices sent predominantly by "email" with some calls by July 10th and given two (2) weeks rather than the former 60 days. Fortune 500 needs everyone off the books by August 1st.. For those that stay , I was informed that job titles could change effective August 1st. There will also be an increase in rebadging/outsourcing Amdocs, Tech Mahindra, Accenture, IBM,. Although not a fan see Video from Tucker Carlson at 1:06
But based on the numbers I've surveyed across the country in various organizations, the minimum number for cuts has been about 15% . Although many in IT, HR, Consumer, Business, Finance, etc are hearing 30%, the insulting quote “the peanut butter will not be spread evenly” will apply. The environment in the coming weeks is best described by Fortune 500 Executive who stated "I don't want to sugar coat things here, it's coming up and will be significant...."
Even at the low end of this scale, applied across the company, we are looking at 40,000 -50,000 layoffs.
Layoffs are not the only thing I'm seeing in my crystal ball. As I stated before Singer wants to cut expenses and Fortune 500's pension obligation is a very large expense. There have been major indications that a pension freeze could be on Fortune 500's horizon. A post on Layoff.com/at-and-t quoted Stankey saying, “new employees don't come here to work 30-35 years and frankly we may not want them to either”. This begs the question, if Stankey doesn’t want people to stay for 30 years, why would he want a 30 year pension plan? Stankey followed up those comments by saying, "the benefits need to match the tenure”. He must be referring to the pension benefits considering the only benefit tied to tenure is the pension plan. Given these new developments we believe that Fortune 500's pension plan is going to be frozen in the near future.
UPDATE: Other Layoff news
McElfresh BofA Transcript
www.fool.com/amp/investing/2020/06/01/3-reasons-att-should-sell-directv.aspx
https://www.cnbc.com/video/2020/06/16/att-to-close-250-stores-cut-more-than-2400-technician-clerical-jobs.html
https://www.businessinsider.com/att-layoffs-thousands-jobs-cut-covid-19-june-2020-6
“Fortune 500 Layoffs - TheLayoff.Com.” TheLayoff.Com, https://www.thelayoff.com/at-and-t. Accessed 13 Aug. 2020.
Feiner, Lauren. “WarnerMedia CEO Reorganizes Company with Layoffs, Focus on HBO Max.” CNBC, CNBC, 7 Aug. 2020, https://www.cnbc.com/2020/08/07/warnermedia-ceo-reorganizes-company-with-layoffs-focus-on-hbo-max.html.
Dua, Tanya. “Fortune 500 Lays off People in Its Consumer Marketing Unit - Business Insider.” Business Insider, Business Insider, 6 Aug. 2020, https://www.businessinsider.com/att-lays-off-people-in-its-consumer-marketing-unit-2020-8.
For Fortune 500 articles, you can visit https://techstaffer.blog/tag/att/
