Washington, D.C. -- This week, Elliott Management announced its plan to extract profits from AT&T by eliminating jobs and sending work to low-wage contractors, further enriching its billionaire founder and CEO Paul Singer.
Adoption of these proposals will harm AT&T’s workers, customers and long-term investors, and the Communications Workers of America is firmly opposed to this strategy. CWA represents over 100,000 working people at AT&T.
AT&T’s great strength has been its dedicated, highly-skilled workforce. That workforce is also the foundation for its future. Instead of allowing Elliott to raid the company’s assets, AT&T should invest in its core business by delivering high-speed internet, video and wireless service to all Americans and invest in its workforce through improved training and retention programs.
“Elliott Management has taken the obsession with shareholder value to an extreme, pushing proposals that in the end benefit only a small subset of shareholders - themselves,” said CWA President Chris Shelton. “Anyone who thinks that Paul Singer and Elliott Management intend to ‘deliver far-reaching benefits’ to AT&T’s customers is not familiar with the destruction this vulture hedge fund leaves in its wake. Working people are putting the vultures on notice. We will no longer feed your greed.”
This playbook is all too familiar. Vulture hedge funds like Elliott Management seek to boost a company’s share price by cutting costs, and then take profits before the long-term consequences set in. One of Elliott’s key proposals is to ramp up share buybacks, a clear indication that wealthy investors are the intended beneficiaries of this plan.
For decades, American corporations have put increasing shareholder value above all other goals for their companies. The consequences have been devastating for working families in the United States, as income inequality has skyrocketed and investment in our communities has plummeted. Working people are fighting back through increased strike activity and support for candidates who pledge to reign in corporate excess. The corporate CEOs who are members of the Business Roundtable have even begun to reassess their priorities.
Instead of returning to the outdated, disproven value extraction model that Elliott is advocating, AT&T should use its existing strengths to pioneer a new model -- a partnership with its employees and customers that measures success not by satisfying the whims of Wall Street but by increasing the opportunity for prosperity for all Americans.