Behind the Big AT&T Strike: Years of Shipping Jobs Overseas

Bruce Vail June 9, 2017

The outsourcing is hitting vulnerable communities in the United States hard. (Photo by David McNew/Getty Images)

A recent three-day strike against telecom­mu­ni­ca­tions oper­a­tor AT&T attract­ed nation­wide atten­tion, even though the mod­ern incar­na­tion of the com­pa­ny is a far cry from the gigan­tic Ma Bell” monop­oly of old. The strike took near­ly 40,000 work­ers off the job. The Com­mu­ni­ca­tions Work­ers of Amer­i­ca (CWA) union was send­ing a mes­sage to man­age­ment: Stop stalling, start negotiating.

The imme­di­ate cause of the strike was the slow­ness of the com­pa­ny to reach new con­tracts with the union for improved wages and ben­e­fits for some work­ers, includ­ing those in AT&T’s wire­less com­mu­ni­ca­tions net­work. But under­ly­ing the dis­pute is a long-term strat­e­gy by the com­pa­ny to degrade the qual­i­ty of its U.S. jobs as it shifts much of its busi­ness to low­er-paid work­ers over­seas, the union says.

In a recent report, CWA details some of the facts. Since 2011, the com­pa­ny has closed about 30 U.S. call cen­ters while reduc­ing the num­ber of jobs at dozens of oth­ers, the union says. These actions result­ed in the elim­i­na­tion of about 12,000 U.S. jobs, with much of the work trans­ferred to call cen­ters in low-cost coun­tries like India and the Philippines.

Accord­ing to the report:

AT&T employs glob­al con­trac­tors to run a large por­tion of its cus­tomer ser­vice oper­a­tions. And AT&T is not sim­ply turn­ing to ven­dors when its in-house call cen­ters are over­loaded. The com­pa­ny has estab­lished a per­ma­nent glob­al net­work made up of thou­sands of low-wage work­ers around the world who han­dle a sig­nif­i­cant share of AT&T’s cus­tomer ser­vice, sales, tech sup­port, and oth­er services.

The so-called busi­ness process out­sourc­ing” (BPO) indus­try is a large and grow­ing glob­al sec­tor that com­petes intense­ly to offer cor­po­rate clients and low­est prices and most tech­no­log­i­cal­ly and cul­tur­al­ly adept ser­vices. Some ven­dor com­pa­nies depend on AT&T for a sub­stan­tial part of their busi­ness, and AT&T has come to depend on these com­pa­nies to pro­vide access to a flex­i­ble labor sup­ply across many countries.”

In addi­tion to India and the Philip­pines, oth­er major des­ti­na­tions for these out­sourced AT&T jobs are the Domini­can Repub­lic, Jamaica, El Sal­vador and Colom­bia, the union reports. Out­sourc­ing con­tac­tors include the large inter­na­tion­al com­pa­nies Teleper­for­mance, Con­ver­gys and Suther­land, among others.

Anoth­er recent study, this one report­ed by the Hin­dus­tan Times, esti­mat­ed the glob­al size of the BPO indus­try at $186 bil­lion, with India rep­re­sent­ing about 36 per­cent of the mar­ket. The news­pa­per also report­ed that the Philip­pines and oth­er Asian coun­tries are chal­leng­ing India’s dominance.

(I)t will be a chal­lenge for India to main­tain its lead­er­ship posi­tion as major coun­tries like US (and) UK con­tin­ue to look for low-cost options towards south-east Asian coun­tries to remain com­pet­i­tive in the glob­al mar­ket,” accord­ing to the Hin­dus­tan Times article.

The CWA reports that the Philip­pines has the largest num­ber of AT&T‑contracted call cen­ters of any coun­try out­side of the Unites States. There are at least 16 such cen­ters, across con­tract­ed eight com­pa­nies, the union says.

Accord­ing to the report, sur­veyed work­ers at AT&T ven­dors in the Philip­pines earn the equiv­a­lent of $1.60 to $2.05 per hour for a 40-hour week. Besides low pay, they also have very lit­tle say in their work­ing con­di­tions, and report­ed­ly face retal­i­a­tion when they join togeth­er to push for change.

Labor crack­downs have also been endem­ic in the Domini­can Repub­lic. Here’s more from the CWA report:

Work­ers at Teleper­for­mance formed a union in June of 2016. From the begin­ning, they have faced an intense anti-union cam­paign from man­age­ment, includ­ing ongo­ing attempts to dereg­is­ter the union through the courts, fir­ing of union lead­ers, threats of black list­ing, a pro­hi­bi­tion on employ­ees mak­ing pro-union com­ments, false accu­sa­tions of fraud against work­ers involved in the union, and oth­er forms of intim­i­da­tion. Union lead­ers have faced intense harass­ment from man­age­ment and some have been forced to quit.”

The out­sourc­ing is hit­ting vul­ner­a­ble com­mu­ni­ties in the Unit­ed States hard. Ridge­land, Mis­sis­sip­pi, a work­ing-class sub­urb of Jack­son, lost 110 jobs when AT&T closed a call cen­ter in Decem­ber of last year (the cen­ter pro­vid­ed near­ly 500 jobs back in 2004). Rur­al Atwa­ter, Cal­i­for­nia, lost 400 jobs when AT&T closed a cen­ter there in 2014. And in Pitts­burg, the com­pa­ny closed a call cen­ter employ­ing 225 work­ers in 2013. (Twelve peo­ple trans­ferred to oth­er AT&T posi­tions.) Back in the 1990s, the Pitts­burg cen­ter had employed more than 1,000 workers.

Union spokes­woman Can­dice John­son tells In These Times that the union has seen some progress on con­tract nego­ti­a­tions since the strike. A ten­ta­tive agree­ment cov­er­ing about 17,000 work­ers in Cal­i­for­nia and Neva­da has been reached and a con­tact rat­i­fi­ca­tion vote is being sched­uled. Talks cov­er­ing a larg­er group of 21,000 union mem­bers in oth­er parts of the coun­try are ongo­ing, but no set­tle­ment appears imminent.

What­ev­er the results of the stalled con­tracts, the union wants an end to the out­sourc­ing (although that is not an explic­it con­tract demand this year), John­son says. Out­side observers are pre­dict­ing a long strug­gle ahead, with the pos­si­bil­i­ty of fur­ther strikes in the future.

The strike real­ly unit­ed the work­ers (at AT&T),” John­son said. We are in the fight.”

Full dis­clo­sure: In These Times staff are mem­bers of the Com­mu­ni­ca­tion Work­ers of Amer­i­ca, and the union is a spon­sor of the mag­a­zine. Spon­sors play no role in edi­to­r­i­al content.

Bruce Vail is a Bal­ti­more-based free­lance writer with decades of expe­ri­ence cov­er­ing labor and busi­ness sto­ries for news­pa­pers, mag­a­zines and new media. He was a reporter for Bloomberg BNA’s Dai­ly Labor Report, cov­er­ing col­lec­tive bar­gain­ing issues in a wide range of indus­tries, and a mar­itime indus­try reporter and edi­tor for the Jour­nal of Com­merce, serv­ing both in the newspaper’s New York City head­quar­ters and in the Wash­ing­ton, D.C. bureau.
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