AT&T CEO John Stankey is bracing for a worsening economy as financial relief from the government wanes and the COVID-19 crisis drags on.

“I don’t know what the front end of 2021 looks like, but my guess is it’s going to be a little bit rockier for some smaller businesses, that we’re going to have some economic stress because of how long the disease has lingered on and the pressure it’s going to put on some of the more social-oriented businesses,” he said today at an investor conference.

“I don’t know that we’ve seen everything play out right now in the business segment and we’re being cautious in our view as a result of that,” Stankey said, adding that the company’s financial guidance is colored by a belief “that we haven’t seen the worst that can come yet, that we’re going to see a softening in the economy.”

Small to midsized businesses (SMBs) have been reasonably resilient during the first six months of the global pandemic, but at least some of those organizations have “been propped up by subsidy through government relief,” he said. Congress hasn’t approved a government relief bill since late March and legislators have effectively abandoned efforts to expand that effort amid partisan gridlock and a presidential election set to take place in 49 days.

“I think you have to kind of plan for a little bit of downside,” Stankey said. "The last six months, my life has been expect the unexpected.”

Part of that exercise involves a rethink in how AT&T operates, where employees complete their tasks, and what these impacts of COVID-19 portend for the company’s future. 

“The new normal for AT&T probably isn’t dramatically different than the new normal for everybody else,” he said, describing the new coronavirus as a shot of adrenaline that accelerated trends that were already underway.

“COVID has shined a bright light on some other opportunities we have to shift our distribution and how we think about serving our customers,” Stankey said. 

“What was important in the urban areas is now distributed. And while we have good infrastructure in place in many areas, we have an opportunity to go do more, we have an opportunity to think about more varied forms of access that are more flexible,” he explained. 

That doesn’t mean all of AT&T’s employees will permanently work from home, but a significant portion of its workforce probably will. “I don’t believe we are an entirely virtual company. I think to do the kind of work we do we need a little bit of serendipity. We need people to be able to come in, and collaborate, and work, and build relationships, but there's no question that we have large parts of our business that can be far more virtual than they were before, and we’re moving down that path to do that,” Stankey said. 

Flexibility in AT&T’s call centers and technician ranks “are going to be with us for a long time to come, and make our business a better business,” he said.