Skip to main content


Search News

Date Published Between

For the Media

For media inquiries, call CWA Communications at 202-434-1168 or email To read about CWA Members, Leadership or Industries, visit our About page.

CWA Alerts Elliott Management Investors About Hedge Fund’s Underperformance, Divestment by University of California Endowment and Pension Fund, and AT&T Job Cuts

After Elliott Management underperforms HFRI and S&P 500, the University of California investment office will leave Elliott Management later this year;

The New Jersey State Investment Council has also redeemed nearly 25 percent of its holdings in Elliott Management

WASHINGTON — The Communications Workers of America (CWA) have sent a letter to Elliott Management's investors calling attention to the fund's underperformance in 2019 and a recent decision by the University of California endowment and pension fund to exit Elliott. In the letter, CWA references a report by investment consultant Cliffwater, highlighting that the hedge fund manager's flagship Elliott Associates generated a net return of just 6.88% in 2019. The fund underperformed the HFRI Fund of Funds Composite Index (8.34%) and dramatically underperformed the S&P 500 Index (31.49%).

Following poor performance, Elliott has seen investor redemptions. For example, the University of California investment office recently reported that it is in the process of phasing out its relationship with Elliott Management. As of June 30, 2019, the University of California endowment and pension funds had more than $450 million invested with Elliott. The University of California investment office has not reported its exit publicly yet, but will later this year. Last May, the New Jersey State Investment Council (NJSIC) announced plans to reduce its hedge fund exposure. As of February 29, 2020, Elliott has distributed $68.8 million, or nearly 25 percent, of the state's overall investment of $295 million back to NJSIC, which the union believes may be part of a larger redemption.

"Elliott Management's recent underperformance highlights what our union has always known: corporate greed is bad for long-term growth," said Chris Shelton, President of the Communications Workers of America. "We will continue to push back against Paul Singer's harmful agenda for AT&T workers and the long-term growth of its network to make sure Elliott's investors know that greed doesn't pay."

"Public sector pension plans and trustees care about long-term returns," said Hank Kim, Executive Director of the National Conference on State Employee Retirement Systems. "We are aligned with investors who promote value creation by investing in employees and infrastructure, not those who seek to extract short-term profits."

AT&T has continued to cater to the demands of vulture hedge fund Elliott Management, which purchased a small stake in AT&T in September 2019. Elliott is pushing AT&T to extract profits from the company by eliminating jobs, outsourcing work, and divesting critical assets. Bloomberg reported last year that Elliott's proposed changes at AT&T could lead to 30,000 workers losing their jobs or facing reductions in wages, on top of harmful job cuts AT&T has already made in recent years. In January, FierceTelecom reported that AT&T cut 4,040 jobs during the 4th quarter of 2019.

Elliott has also won a commitment from AT&T to spend $30 billion on stock buybacks, which will drive up its share price to enrich a small group of wealthy investors, leaving fewer resources for building next generation wireless and fiber broadband networks and training workers for the jobs of the future.

AT&T's President and Chief Operating Officer John Stankey announced in early March that the company would purchase another $4 billion in stock buybacks during Q2 of FY 2020, in addition to the $4 billion the company repurchased during Q1. AT&T plans by the end of 2022 to use between 50% and 70% of its free cash flow to buy back 70% of the stocks the company issued to purchase TimeWarner. Credit-rating agency Moody's has raised concerns that the large cost of the stock buyback plan puts AT&T at risk for a credit downgrade.

Amid the Coronavirus outbreak, AT&T's CEO Randall Stephenson announced plans to cancel the company's Q2 purchase of $4 billion in stock buybacks. Last Friday, CWA President Chris Shelton sent a letter to Mr. Stephenson in support of canceling the stock buybacks. President Shelton also reiterated the union's commitment to work collaboratively with AT&T to ensure worker and customer safety, solve problems, and provide reliable service to customers during the COVID-19 crisis.

In the letter to the hedge fund's investors, CWA notes that despite making demands that have led to real job losses for AT&T employees, Elliott Management's actual investment in the company appears to be much smaller than it claimed. In a mid-February filing with the SEC, Elliott showed that it is making only a very small financial outlay upfront as it owns just 5 million shares of AT&T stock, worth around $195 million. This follows an October release where Elliott reported its funds "collectively own $3.4 billion in common stock and economic equivalents of AT&T Inc."

The remainder of Elliott's holdings come in the form of derivatives, including 202,500 call options to purchase AT&T shares (bought for pennies on the dollar and worth $791 million as of December 31, if exercised), according to an Elliott Management SEC filing. Elliott likely holds the balance of its investment in AT&T in synthetic long exposure through the sale of puts. Thus, Elliott made less than 10% of its claimed investment in AT&T through a small purchase of AT&T equity. The remaining 90% of its investment is through derivatives that are largely undisclosed.

CWA asked that investors reach out to Elliott Management with a series of questions about its activist campaign at AT&T in an effort to better understand the fund's investments into the company and to help protect the jobs of working people.

CWA represents approximately 100,000 employees at AT&T.


About CWA: The Communications Workers of America represents working men and women in telecommunications, customer service, media, airlines, health care, public service and education, and manufacturing.

Press Contact

CWA Communications