Friday, April 18, 2008

The right choice

So what do we make of the news Thursday that AT&T is devoting $100 million over four years to reduce the high school dropout rate (story here)?

I've been pretty critical of AT&T Chairman, CEO, and President Randall Stephenson (here, for example) for his inability to solve the problem of hiring customer service people, jobs that AT&T moved overseas in the first place. Then, in a burst of national pride, the company said in 2006 that it would bring 5000 jobs back. They've filled only 1400 of those positions and, according to Mr. Stephenson, can't do better because the high school dropout rate is high (our students are "defective") and there's no reason American companies have to hire locally ("I know you don't like hearing that, but that's the way it is").

My real criticism of Mr. Stephenson is that anyone who makes his kind of money should be a problem-solver. If your goal is to hire 5000 people, then you find a way to do it. You raise the starting salary. You provide a good working environment. You offer education benefits. You hire good customer service personnel away from other companies. You do something to find the source of the problem and take steps to solve it.

What you don't do is stand in front of a business group and whine about it. Let's say you give an assignment to one of your employees, maybe you tell a regional manager to increase sales in his area by 10%. When he or she comes back to you in a year and says, "I couldn't do it, my customers are too dumb to know that they should sign up for our wonderful services," would Mr. Stephenson find that an acceptable reason?

So it was clear to me that Mr. Stephenson didn't see the retrieval of these jobs as a real priority, as a problem to be solved. And many people were more aggrieved than I:
AT&T is "trying," according to the article, to return 5,000 customer service jobs to the United States from India. However Stephenson claims that out of the 300 million people in this country he's having a hard time finding 5,000 who are up to snuff. He cites high school dropout rates in some areas of 50%, although he doesn't say where the dropout rate is that high. people from America, with it's "50% dropout rate" aren't good enough, but people from a country where many have no schooling at all are?

Additionally he let it slide that Americans with university engineering degrees don't cut it, either. "We're able to do new product engineering in Bangalore (India) as easily as we're able to do it in Austin, Texas. I know you don't like hearing that, but that's the way it is," the article quotes him as saying.

Do you think maybe the real motivation here is that while someone doing customer service work for AT&T in the United States makes up to $29,000, the people in India make $2,000? Do you think it's because in the United States we have the Communications Workers of America, where if you feel like you're getting the shaft on your job you have a place to turn to for help, whereas in India they take it up the butt because the alternative is to go back to starving in the desert?

Yeah, "Unions drive jobs overseas." Pardon that engineering graduate from MIT if he has $200,000 in student loans to pay back, a $350 a month car payment, and the average price of a home for his family is $300,000. Don't forget that $50 tank of gas he has to buy to go to work and his $4 a gallon milk. He might have a hard time matching the Bangalore guy's $2,000 price.
(That from Art's Bar and Grill.)

But now, AT&T is putting $25 million a year into helping young people stay in high school. The easiest thing in the world would be to put on the cynical hat, to assume that this is just a smokescreen to divert us from Mr. Stephenson's comments or his large salary. And that may well be true.

You can pick nits with the programs, as well. It's not clear to me that we need "dropout prevention summits" run by Colin Powell's organization. The data is unclear as to how many students really do drop out, and I don't know if the goal is to create a climate in which students want to stay in school, or to attract dropouts back to school. And the "shadowing" program, in which 100,000 students will spend 4 hours apiece following AT&T employees around to get "a firsthand look at the skills they will need to succeed" sounds to me like a weak version of "Take Your Children to Work Day."

But it's something, and, PR stunt or not, it's an attempt to, in a classic corporate way, address the situation.

Then today I read this:
Telecom giant AT&T plans to lay off 1.5 percent of its employees, primarily in management, in an effort to streamline its operations, the company announced Friday.

AT&T had about 310,000 employees at the end of 2007, meaning the layoffs would affect about 4,650 workers.
Note: I worked for AT&T about 15 years ago, and pretty much everyone in Bell Laboratories was classified as management because the salary scales required it. Even entry-level developers were "managers." I don't know if they still do things that way, but I'm guessing that some non-managers will be included in the layoffs, so their attempts to sugar-coat this situation ("oh, they're all just well-paid, do-nothing managers") is likely not true.

In summary, we have a major company that's going to give money for summits, which should create jobs for "summit organizers," but have an uncertain effect on dropout rates. We have money for schools and nonprofit organizations, with no clear linkage as to how that keeps students in school. And we have a shadowing program, where 100,000 people will get to spend half a day seeing what real people do for a living (and we hope that none of these kids will be assigned to someone who is laid off while they're there, even if that would be the best possible lesson they could get about the 21st century working world).

On the other hand, we have 4,650 people who will be laid off, which (at a national average family size of 3.14) comes to 14,600 people who will be directly affected, and some greater number of people working in businesses that depend on the former AT&T-ers as customers will be hurt. The communities in which these people will likely be damaged as some number of them have to move in search of work. Some of these folks will see permanent impairment to their careers, because whatever they specialized in is now being done solely in another country.

What is the sum total of these two announcements? I don't know, I can't say what the tax implications of the dropout program are. What I do know is that, if those 4,650 people make any more than an average of $5,376 a year, then AT&T more than paid for Thursday's announcement with Friday's announcement.

1 comment:

Red Oak said...


Yes, it's all just a dog and pony show so people stupid enough to believe it will say, "Gee, I understand" when, not only are those remaining 3600 jobs not returned to the U.S. but those 1400 new hires are ditched and their jobs shipped back overseas.

$25M for "drop-out prevention"? Yes, it's a PR stunt. Unless Mr. Stephenson, for some reason as misinformed about the location of qualified employees as Rick was about the waters in Casablanca, limited his talent search to barrios or ghettos or maybe deep Appalachian hollers. Yeah, that might explain his odd misapprehension and why he's inexplicably overlooking the millions of potential employees in other areas of the country who have perfectly respectable graduation rates and test scores.

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