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(Bloomberg) -- AT&T Inc. damped the fires of Elliott Management Corp.’s activist pressure campaign, unveiling a three-year plan under which the phone giant will add two board seats and separate its chairman and chief executive officer roles.AT&T on Monday pledged to make no more major acquisitions soon, answering Elliott’s concern about the multibillion-dollar purchases of Time Warner and DirecTV. Randall Stephenson, 59, the architect of AT&T’s media acquisition strategy, will stay on as chairman and CEO through at least 2020, and the company will split the roles after he eventually leaves.The resolution with Elliott, which now holds a $3.4 billion stake in the company, removes a distraction for AT&T before it introduces a splashy new streaming-video service to challenge Netflix Inc.’s dominance. The company plans to unveil more details about the spring launch of HBO Max at an event Tuesday.“You’ve got to give credit to AT&T for quickly and proactively working with Elliott,” said Kevin Roe, an analyst with Roe Equity Research LLC. “It is reassuring to see Stephenson committing to the CEO role through at least 2020, and the long-term guidance is long overdue and extremely helpful to investors.”As part of the three-year financial plan, AT&T said it will book annual revenue growth between 1% and 2%, increase its dividend as a percentage of cash flow, and pay off debt to reach a leverage ratio between 2 and 2.25 in 2022. It committed to reaching earnings of $4.50 to $4.80 a share by 2022, compared with analysts’ current estimate of $3.39 a share for that year.“We commend AT&T for the positive steps announced today, which will create substantial and enduring shareholder value at one of America’s greatest companies,” Elliott partner Jesse Cohn and portfolio manager Marc Steinberg said in a statement. “It is clear to us that AT&T is committed to and accountable for creating shareholder value over the near and long term.”While Elliott said it’s supportive of AT&T’s strategy, there’s isn’t a standstill agreement that typically comes with a formal accord. That will allow Elliott to continue to agitate at the company if it doesn’t like the direction AT&T takes.AT&T also said it expects its asset sales this year to total $14 billion by the end of December. The company agreed earlier this month to sell its operations in Puerto Rico and the U.S. Virgin Islands to Liberty Latin America Ltd. for $1.95 billion in cash.Seeking ReformsDallas-based AT&T and Elliott have been holding talks since the New York investor group announced about five weeks ago that it had acquired a $3.2 billion stake in AT&T and was seeking reforms aimed at getting the stock moving.AT&T gained as much as 5.3% in New York trading Monday. The stock is now up 35% this year, compared with the S&P 500 Index’s 21% increase.The company also reported third-quarter results Monday, missing analysts’ expectations for subscriber growth and revenue. With a net loss of 1.2 million TV subscribers in the third quarter, AT&T has now shed about 3.7 million video customers since the slide began five quarters ago.AT&T lost 217,000 regular monthly wireless subscribers in the period. Analysts expected a loss of 60,000.(Updates shares in 10th paragraph.)\--With assistance from Scott Deveau.To contact the reporter on this story: Scott Moritz in New York at email@example.comTo contact the editors responsible for this story: Nick Turner at firstname.lastname@example.org, John J. Edwards IIIFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- If activist shareholder Elliott Management Corp. has its way, more than 30,000 AT&T Inc. workers could lose their jobs or face reductions in wages, according to a new estimate from the Communications Workers of America union.Most of the impact on workers would come from divestitures of DirecTV and AT&T’s landline business and closures of the company’s retail locations, if the company follows Elliott’s suggestions, said the CWA, which represents more than 100,000 AT&T employees.In September, billionaire Paul Singer’s New York hedge fund disclosed a new $3.2 billion position in AT&T, along with a plan to boost the telecom and media giant’s share price by more than 50% through asset sales and cost cutting. The fund hasn’t specifically called for job cuts. AT&T has said it has no plans to dispose of DirecTV, but Elliott could potentially engage in a proxy battle to push its agenda through.“If Elliott doesn’t get their way, they are going to do a proxy fight on the board, and then any or all of these things could happen,” said Christopher Shelton, president of the CWA. “We can’t leave that to chance, because that’s 30,000 jobs.”The Teamsters Union said Wednesday that it “stands in solidarity” with the CWA and its members “as they fight back against plans by a vulture capitalist hedge fund that would harm the company’s workers.” The Teamsters represent 1.4 million people.Elliott and AT&T didn’t immediately respond to requests for comment.Among the potential cuts the CWA sees:DirecTV employs about 10,000 workers represented by the CWA and the International Brotherhood of Electrical Workers whose jobs could be at risk if AT&T decides to divest the business, said Nell Geiser, assistant director of research at the CWA. Some of these jobs are at call centers, while others include technicians who do home installations and tech support.The landline business is supported by about 11,000 people whose jobs may be at risk and who work in rural areas in 26 states, the CWA estimated.Were AT&T to match Verizon Communications Inc. in the number of branded stores operated by third-party dealers, rather than by the company, it would close 970 corporate locations, the CWA said. It might close some additional corporate outlets due to geographic redundancy. In total, these moves would eliminate more than 8,500 retail sales workers, according to the CWA.If AT&T sells its operations in Puerto Rico and the Virgin Islands to Liberty Latin America Ltd. as planned, that could affect about 900 union jobs, the CWA said.The estimates don’t include workers who aren’t yet part of a union, “such as the tens of thousands at WarnerMedia,” the CWA said.These estimates should be taken with a grain of salt. In September, AT&T said DirecTV isn’t for sale, for example. Earlier this month, presidential candidate Elizabeth Warren called on AT&T to reject Elliott’s proposal as it would result in loss of jobs.(Updates with Teamsters comment in fifth paragraph.)\--With assistance from Scott Deveau and Scott Moritz.To contact the reporter on this story: Olga Kharif in Portland at email@example.comTo contact the editors responsible for this story: Nick Turner at firstname.lastname@example.org, John J. Edwards III, Rob GolumFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.