This is a first. AT&T says it’s merger with T-Mobile USA will not eliminate jobs like every other merger has done. It will create jobs.
This is something I don’t yet understand. I am not the only one who is confused. The FCC is also confused and so are all the reporters who call me for my opinion on this topic. It just doesn’t make sense.
I know AT&T. I like AT&T. AT&T is a good wireless company. But create jobs after a merger? One of the benefits to a company acquiring another is the savings from eliminating jobs.
All I can say is I don’t understand.
These are not the actual numbers, but let’s use this for example. Company A has 50,000 workers. Company B has 30,000 workers. After the merger they have 80,000 workers. Then after the first several quarters the job cuts come. They decide who stays and who goes. Suddenly 80,000 drops to say 60,000. That’s a loss of 20,000 jobs. That is typical.
That is what has happened with every other merger I have seen over the last 25 years.
So what is AT&T doing that is different? What is AT&T saying?
Job cuts and the savings from them are one of the things that makes mergers worth while. In this case perhaps AT&T really just needs the spectrum and is willing to go all out to get it. We just don’t know yet.
I am sure AT&T made this claim to help them, but no one understands so instead this is hurting the.
They should clarify.
If this is a true open hearted offer that will not only help AT&T, but also help the US workers and the economy? That is what it sounds like.
If this is an offer to let all workers keep their jobs and in fact increase jobs that would be good news. A real bargaining chip thrown on the table by AT&T.
But AT&T have not clarified yet.
The FCC doesn’t understand it either and has been asking AT&T to clarify, since May. No response.
A result in increased jobs would be a great outcome, especially in this lousy economy. When workers lose their jobs its much more difficult to replace it. Companies just aren’t hiring like they had been during previous mergers.
AT&T knows this and I think that’s why they made this claim.
The only problem is the FCC doesn’t understand and is asking for clarification.
Comments from Public Knowledge say that “no jobs will be created through this deal.”
AT&T says it will generate jobs over the next decade. That’s true, however those jobs would be generated regardless of the merger. If the merger does not happen those jobs would still be created. They have nothing to do with the merger.
At this point all I can do is look at all the previous mergers and conclude that tens of thousands of jobs will be lost if this deal is done. Unfortunately that is what happens.
This is not a normal merger. We have seen countless normal mergers in the wireless space. Today there are fewer, but larger companies. Mergers today have to make sense for the industry, the economy and the market as well as the companies who want to get together.
Under this tough scope AT&T finds doing this deal very tough.
In addition, in this weak economy, we have to be concerned with where the workers would go in this weak economy. This is in addition to all the regular merger questions.
More to come.
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Please attribute to Jeff Kagan, Tech Analyst with www.jeffKAGAN.com
If you would like to discuss, call me at 770-579-5810 or send an email to jeff@JeffKAGAN.com
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Jeff KAGAN| Tech Analyst w Atlanta based jeffKAGAN.com
Analyst sharing perspective on the changing industry for 25 years
~ Also Columnist, Author, Consultant, Speaker
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Contact InformationJeff Kagan
Title: Tech Analyst ~ Telecom Industry Analyst
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