Will the stock prices dropping accelerate the layoffs?
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AT&T generates a ton of revenue -- about $131 billion in the TTM. It's certainly a legacy business from the telecom standpoint, yet it has expanded beyond telephony. What you might not know is AT&T also offers application management, security service, integration services, customer premises equipment, and government-related services.
Yet when you examine the income statement, there's virtually no year over year growth in revenue. That's because the company is in a seemingly never-ending war with myriad competitors, though it is the No. 2 player in the U.S. Still, telecom services are, at this point, a commodity. That means the ultimate winner is going to be the company that markets the best and has the best customer service. Margins will get increasingly thinner.
That's the reason AT&T purchased DIRECTV. It wasn't growing organically, so it is growing via acquisition and synergy. There's nothing wrong with that, and the acquisition makes a lot of sense. LA, Mexico is a different deal and a problem in the near future.
BUT timing couldn't be worse for the giant and their employees, no doubt cuts will continue to offset loses
ATT position in Latin American markets, is not clear, Although AT&T is committed to Mexico, may not be comfortable with the region's currency headwinds, it does not look good for US employees
Very well said, and I totally agree with you.
Yes, Given the low growth mix of AT&T’s businesses, challenging competitive environment and declining margins and cash flow in its existing operations, I believe that the company may be hard pressed to achieve the leverage reduction goal. With respect to DTV, they are paying a very high price for cash flow to replace declines in cash flow in their other businesses. Their credit rating is in danger, acquisitions of DirecTV and Iusacell. In addition, 3B investment in Mexico, especially since America Movil will be shedding assets. The much-needed spectrum comes at a steep cost too. The substantial spending commitments are likely to boost leverage considerably. Hefty dividend payouts will increase with the issuance of new shares to fund the DTV transaction.