The coronavirus pandemic has severely affected various aspects of society, including the economy, as stores have to close for months to avoid people gathering together, making the spread of COVID-19 faster.
Among the companies significantly affected is AT&T, with the company announcing on Tuesday, June 16, that they will be shutting down 250 stores and would have to lay off around 3,400 jobs as a result.
AT&T Has Decided to Shut Down Stores
In a report by Business Insider, the shutdown of the AT&T stores will happen gradually over the next few weeks, according to the statement provided by Communications Workers of America, a union representing the AT&T employees.
Some Cricket Wireless and AT&T Mobility stores will close, affecting 1,300 jobs, while the other layoffs will be clerical and technical workers.
In addition, the laid-off workers are commonly the nonpayroll ones who are located outside of the US as well as drivers.
The company's decision was based on the "economic impact and changed customer behaviors" caused by the COVID-19 pandemic, so they are now focusing on the growth areas.
The plan also includes addressing the lower customer demand for some of the legacy products.
Besides lower income due to the pandemic, the coronavirus threats have also pushed customers to make their transactions online, so even if the lockdown restrictions have eased a little, people would still rather transact online than visit a store.
"As a result, there will be targeted, but sizable reductions in our workforce across executives, managers, and union-represented employees, consistent with our previously announced transformation initiative," AT&T explained.
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What Happens to Laid-Off Workers?
But what would happen to the workers who would be laid off by the company?
In a conference last March, Stankey described the company's cost-cutting initiative that includes the "head-count initiative."
The company said that reducing their workforce is not something that AT&T takes lightly as it's a difficult decision, according to a report by Ars Technica.
"For employees who are leaving as part of these changes, we're offering severance pay and company-provided healthcare coverage for up to 6 months for eligible employees," Stankey said.
Additionally, many of the retail employees that will be affected by the store shutdowns will be offered another position in the company.
Those that have volunteered to leave declined a new job within the company or don't qualify for another position will still receive severance pay, helping them in these trying times where finding work would be much harder.
Significant Changes for the Telcom Giant
In the past months, there have been several significant changes for AT&T as well as for the wireless industry as a whole.
Last April, the company announced that chief executive officer Randall Stephenson would step down as CEO and will be replaced by John Stankey starting on July 1 after the company's board elected him.
Nevertheless, Stephenson will still remain as the executive chairman of the board until January 2021.
Over the last few months, since the pandemic started, millions of people in the US alone have lost their jobs, increasing the country's current unemployment rate.
