Domestic telecom giants AT&T and T-Mobile US are set to slash thousands of jobs at a time when the U.S. is posting record levels of unemployment impacted by the ongoing COVID-19 pandemic.

The Communications Workers of America (CWA), which represents more than 150,000 AT&T employees, said that the carrier plans to cut more than 3,400 jobs “over the next few weeks.” Those cuts will include “technician and clerical jobs across the country.”

“I want to know where these jobs are going,” said Joe Snyder, president of CWA Local 4302 in Akron, Ohio, in a statement. “From where we sit, it looks like AT&T is pushing the work to low-paid contractors who do not have the same training, experience, and commitment as CWA members. The money they are saving goes into the pockets of wealthy shareholders looking for short-term profits instead of staying here in our communities. AT&T said they were going to step up for their employees and their customers. I guess that’s just another broken promise.”

AT&T is also moving to close hundreds of retail stores that CWA said will impact 1,300 retail jobs. The labor union said the cuts could include up to 250 locations. All operators have been forced to shut retail locations tied to local ordinances tied to the COVID-19 pandemic.

“These actions align with our focus on growth areas along with lower customer demand for some legacy products and the economic impact and changed customer behaviors resulting from the COVID-19 pandemic,” the company noted in a statement to SDxCentral. “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. Additionally, we’ll be eliminating more non-payroll workers — the vast majority of which are outside the United States – than we are managers or union-represented employees. Reducing our workforce is a difficult decision that we don’t take lightly. For employees who are leaving as part of these changes, we’re offering severance pay and company-provided healthcare coverage for up to six months for eligible employees.”

AT&T Communications CEO Jeff McElfresh earlier this week hinted at the move during an investor conference.

“You should expect AT&T will phase in and phase out many of these plays market by market as commerce begins to recover, shoppers begin to make their way back out onto the streets, so it’s not a one-size-fits all, I think it’s going to be a very dynamic and local market aspect that we have to pay attention to,” McElfresh said.

AT&T has consistently cut thousands of jobs over the past several years. CWA, citing AT&T’s own reports, said that more than 41,000 jobs have been eliminated since 2018, with the carrier ending the first quarter of this year with 244,490 employees.

More broadly, the coronavirus outbreak coupled with AT&T’s ongoing effort to virtualize its core network functions with SDN and other technologies is leading to dramatic job losses at the company. Prior to the COVID-19 crisis, AT&T said it planned to cut $1.5 billion in labor-related costs this year, and in April hinted at possible additional operational cuts that could include more job losses.

Meanwhile, T-Mobile US is reportedly set to cut hundreds of jobs just weeks after closing on its $26 billion purchase of Sprint. TechCrunch reported that the cuts came during a six-minute call on Monday with Sprint employees at its inside sales business.

The carrier noted in a statement that as part of its move to merge the T-Mobile US and Sprint operations, “some employees who hold similar positions are being asked to consider a career change inside the company, and others will be supported in their efforts to find a new position outside the company.”

T-Mobile US attempted to counter the news by stating that the employment changes are part of a broader move that will see the carrier hire 5,000 new positions over the next year. Those new hires will be in “areas of growth and focused on serving customers such as retail, care, T-Mobile for Business, engineering, and network organizations.”

CWA was also opposed to T-Mobile US acquiring Sprint, citing expectations that the move would result in job cuts.

Analysts noted that the ongoing COVID-19 pandemic is obviously impacting operations, but that the cuts are also tied to recent mergers and acquisitions.

"M&A trends are that there are always going to be layoffs tied to redundancies," said William Ho, founder and principal analyst at 556 Ventures. "And COVID can be blamed for a lot of this at the moment. But the optics are definitely bad. In the case of T-Mobile they have been talking about job creation coming out of the Sprint deal so to now be cutting jobs does not look good."

Ho did note that T-Mobile US has been pushing its "Day 1" message for the combined operations as happening on August 1, so the carrier could theoretically still begin adding jobs then.

Chris Nicoll, principal analyst at ACG Research, concurred, noting that job cuts from the merger were more a matter of "when (sooner generates the most savings) and how deep." He also said that the COVID-19 issue "provides a convenient excuse to perhaps make deeper cuts than actually attributable to the pandemic without a lot of scrutiny."

As for AT&T, Ho explained that the rash of big-ticket M&A activity that has resulted in a substantial debt load is also part of the issue. "Those deals could be impacting their overall view on cost reductions," Ho said.