Telecom giant AT&T scored a new $5.5 billion loan but hinted at possible operational cuts that could include more job losses as it sets itself up to ride out the current COVID-19 related economic uncertainty.

“The strength and relevance of our core subscription businesses, our continued execution on our business transformation initiatives, and sizing our operations to economic activity will provide cash from operations that will support network investments, dividend payments, and debt retirement, as well as the ability to invest in business opportunities that arise as the economies recover,” the company noted in a financial update tied to the COVID-19 pandemic.

The “sizing our operations to economic activity” part indicates that AT&T could be set to make cuts to services and operations if needed. An AT&T spokeswoman wrote in an email that the company had no comment on the link between the statement and possible job cuts, explaining that AT&T was in a "quiet period" tied to its upcoming earnings release on April 22.

The carrier had previously noted that it planned to cut $1.5 billion in labor-related costs in 2020, backed by its SDN investments that have allowed the carrier to increase the use of automation to run its network. The company ended 2019 with 247,800 employees, which was a 7.6% decrease from the year prior.

AT&T COO John Stankey followed up that announcement last month by saying that the carrier was weighing a list of options to cut tens of billions of dollars in costs that would also likely result in even more dramatic job losses. He told an investor conference that AT&T is looking at “10 broad initiatives that we believe can generate double digits of billions over a three-year planning cycle.”

Prior to today’s update, AT&T had reported that capex was down nearly 6.4% in 2019 to $19.4 billion, and it projected a further capex decline of about $3 billion in 2020. It did not commit to any additional capex spending for the year. Rival Verizon last month said it will allocate an additional $500 million this year toward bolstering its network tied to the COVID-19 outbreak.

The term-loan agreement announced today was with a dozen banks “to provide additional financial flexibility,” and was linked to the $12 billion cash AT&T had on hand at the end of 2019. It also builds on the mountain of debt the carrier has been carrying following a number of big-ticket acquisitions.

AT&T CEO Randall Stephenson last year said that the carrier’s No. 1 priority was to reduce its debt load. It managed to cut $20 billion in debt last year, but still ended 2019 with around $151 billion in total debt.

AT&T in its latest financial update said that so far this year it has received around $4 billion in proceeds from a preferred stock offering and moved on a $4 billion share repurchase program that was completed in March. It did note that it has since canceled another $4 billion share repurchase program that was scheduled for the second quarter and stopped all share repurchase plans.

The carrier expects to generate around $2 billion later this year from the sale of its Central European Media (CME) business and other proceeds from the sale of some of its real estate and tower holdings. It also plans to close on the sale of its Puerto Rico and U.S. Virgin Island operations for another $2 billion.

AT&T is also sitting on a $15 billion revolving line of credit, though said it does not expect to tap into that line this year.

“Continued access to commercial paper, bond markets and other financing activities which, as in the past, will be utilized as part of normal financing activity based on cost, duration, and overall market conditions,” the carrier explained.

AT&T last year generated just under $30 billion in net income.

AT&T also said that it does not expect to see any impact to its supply chain in the near term due to the COVID-19 outbreak.

“Over the past several years, the company has worked with its suppliers to ensure a geographically diverse supply chain to reduce risk in these types of situations,” it stated. “While the COVID-19 pandemic is subject to rapid change, in general, the company believes its exposure to near-term equipment shortages is limited.”

The carrier is in the midst of rapidly expanding the reach of its 5G network, with previously stated plans to cover more than 200 million potential customers by July.