AT&T is Reportedly About to Have Significant Layoffs

[Jimbo]

Jimbo, watch OUT for the big "gotcha" they pull on their buyout offer. It got us BADLY.

They added it on our final paycheck AS IF it was a "bonus". Because of that, it cost each of us 36.9% combined taxes right off the top! That's Federal, State, and both SS taxes. In my case, it took enough out of it, that I could have lived on that tax deduction for 1 year! Also, they refused to put any of it into the 401k or any other tax shelter, because they claimed the Feds wouldn't allow it on a RIF package. When I filed my taxes the following year, because I in effect got double wages in one year, I only got back about 1/4 of the taxes they soaked me for.

Also, in my case I also qualified for full retirement, so I got a better payout IF I went that way, which I did even though I was only 56 at the time (end of Sept 2016 - 3 months short of being 57). I just turned 60 last month. So technically, I got the best combination of retirement AND the one year separation "perks" (full medical/dental, etc) they were offering others.

P.S. IF you are over the age of 55 and specifically lose your job due to a RIF, you can tap your 401k if needed WITHOUT paying the bonus 10% to the Feds. All you pay is the normal 20% off the top. You don't have to wait until age 59.5. In my case, I was able to pay off the house and get debt-free, and not touch the 401k until last year.

That sux that they lumped that on your check, but it sounds like you worked it out in the long haul.

I haven't made the 59.5 mark yet, but close.
I do have the multiple of years and age in to retire, they go by 75 if I recall.

Some of the guys that are close are hoping for years and age and pay of 1,1 and 1 ....
I'd be happy with 0, 2, 2or 3 would be nice .... but it will never happen.

Back in the late 90's the company offered (via age and years I'm sure) but some of my friends back then left with between $150,000 and $350,000 in buy outs.

Those days are LLLLLOOOOOOONNNGGG gone.

I'm leaning toward the Lump Sum, but I know a few that took the annuities instead.

 

[slice1900]

Jimbo, watch OUT for the big "gotcha" they pull on their buyout offer. It got us BADLY.

They added it on our final paycheck AS IF it was a "bonus". Because of that, it cost each of us 36.9% combined taxes right off the top! That's Federal, State, and both SS taxes. In my case, it took enough out of it, that I could have lived on that tax deduction for 1 year!

How is that a scam? The buyout is income, and income is taxable. There's no legal way for them to give you a buyout that isn't taxed.

 

[Jimbo]

How is that a scam? The buyout is income, and income is taxable. There's no legal way for them to give you a buyout that isn't taxed.

A buyout is typically spread out over years, or as a lump some, but the taxes are not all at the initial investment.
If so, the buy out would be ate up in taxes entirely.

 

[primestar31]

How is that a scam? The buyout is income, and income is taxable. There's no legal way for them to give you a buyout that isn't taxed.

I never said it was a "scam", just that he should watch out and plan for it if he takes a buyout. Suddenly losing over 1/3rd of the money skimmed off the top, can put a real crapper on any future plans. As you won't get as much IN HAND as you think you will, so perhaps can't pay off all your bills and such that you might have been planning to do.

 

[slice1900]

A buyout is typically spread out over years, or as a lump some, but the taxes are not all at the initial investment.
If so, the buy out would be ate up in taxes entirely.

Of course not, if it is paid over time you will be taxed as it is paid like any annuity. I guess I could see some people being shocked at the size of the tax bite, if they weren't aware of how marginal rates work so the percentage they pay on the buyout will be much higher than the overall percentage they paid on the rest of their income which had exclusions/deductions reducing the amount on which taxes are paid and started at a lower graduated rate.

 

[Inclined Orbit]

Its fairly standard to receive a buyout as a lump sum and that can easily put you in a higher tax bracket for the year its taken. I wish I only had 1/3 taken out of my paycheck when I was working.

Then wait until your retired and skim some out of your 401K or IRA. Say you need $100k for something and your combined fed and state tax bracket is 38%. You would assume $138k would be withdrawn and $38k is flushed down the toilet because it was originally pre tax. Not so. Its calculated as how much do you take out to leave the $100k you need and you will be flushing about $60k+ down the toilet to get your $100k. Its quite a shock.

BTW, for this round of ATT layoffs, people targeted will be informed between Jan 21st and 31st and their management picked them for layoff last December. If they do not find other employment within the company by March 31st they will be gone. Its estimated about 14k people will be affected. Also, these pending layoffs were not reported by ATT, they were leaked.

I never said it was a "scam", just that he should watch out and plan for it if he takes a buyout. Suddenly losing over 1/3rd of the money skimmed off the top, can put a real crapper on any future plans. As you won't get as much IN HAND as you think you will, so perhaps can't pay off all your bills and such that you might have been planning to do.

 

[trojan67]

They offer about $30,000 ...
Previous friend that Did go, said it came to about $24,000 after taxes.

Day r

 

[nelson61]

A small example of why AT&T needs to cut costs.
They started a 2 year discount promo for Directv in June 2016 and it has been rolling off to 1 year deals with a corresponding loss of those customers experiencing sticker shock when their bill jumped.
The next quarterly report will likely continue to show a brutal lose in customers.

 

[primestar31]

That sux that they lumped that on your check, but it sounds like you worked it out in the long haul.

I haven't made the 59.5 mark yet, but close.
I do have the multiple of years and age in to retire, they go by 75 if I recall.

Some of the guys that are close are hoping for years and age and pay of 1,1 and 1 ....
I'd be happy with 0, 2, 2or 3 would be nice .... but it will never happen.

Back in the late 90's the company offered (via age and years I'm sure) but some of my friends back then left with between $150,000 and $350,000 in buy outs.

Those days are LLLLLOOOOOOONNNGGG gone.

I'm leaning toward the Lump Sum, but I know a few that took the annuities instead.

About the so-called "59.5" rule for 401k's: There's a NICE exception you may not be aware of, that applied to me. IF you are OVER age 55, and lose your job due to a "separation of service" IE: R.I.F.(reduction in force) Reorg, etc, you are allowed to immediately (if needed) start taking 401k withdrawals from THAT companies 401k that you are vested in, and only pay regular income taxes at whatever your bracket is at that time. There's NO additional 10% penalty, even though you may be getting that money before the normal 59.5 year age.

This rule does NOT apply if you "roll-over" any of that 401k to another 401k, or IRA. So be aware of that, if you'll have need to tap that money source. Don't roll it over, or the 59.5 rule applies again!

 

[bobvick]

They are getting rid of the legacy network in urban and suburban places. In rural America they (and Verizon and Frontier and everybody else) are letting it rot. We are not far from having rural people, with no cell or internet service, and no access to POTS.

I agree. I think what you will see though, are more and more cooperatives doing projects to bring fiber optic service to rural areas. There are currently two electric cooperatives in Alabama with a FTTH build out and two more that have projects starting this year to cover their territories. In our county, CenturyLink basically has left their copper network to rot, except in very few areas. Our electric cooperative is one of the two (currently) with a fiber to the home project. They have basically put CenturyLink and the local cable company (a mom and pop, not a Charter or Comcast) out of business for all intents and purposes. I got the service in December and went from a 4.0Mbps/512Kbps DSL connection from CenturyLink to 1Gbps/1Gbps fiber connection and VoIP phone service from them. The difference from the DSL is like daylight and dark, and it is only about $120 per month for both. I was paying CenturyLink about $100 for a POTS line and the DSL. The Internet connection is $79.99 with unlimited data, (the coop actually encourages customers to stream, they even have seminars throughout the communities to teach those that do not know how to use streaming services, like Sling, DirecTV Now, YouTube TV, etc...), the phone service is $29.99 per month, nationwide calling, and all the features.

 

[nelson61]

I agree. I think what you will see though, are more and more cooperatives doing projects to bring fiber optic service to rural areas. There are currently two electric cooperatives in Alabama with a FTTH build out and two more that have projects starting this year to cover their territories. In our county, CenturyLink basically has left their copper network to rot, except in very few areas. Our electric cooperative is one of the two (currently) with a fiber to the home project. They have basically put CenturyLink and the local cable company (a mom and pop, not a Charter or Comcast) out of business for all intents and purposes. I got the service in December and went from a 4.0Mbps/512Kbps DSL connection from CenturyLink to 1Gbps/1Gbps fiber connection and VoIP phone service from them. The difference from the DSL is like daylight and dark, and it is only about $120 per month for both. I was paying CenturyLink about $100 for a POTS line and the DSL. The Internet connection is $79.99 with unlimited data, (the coop actually encourages customers to stream, they even have seminars throughout the communities to teach those that do not know how to use streaming services, like Sling, DirecTV Now, YouTube TV, etc...), the phone service is $29.99 per month, nationwide calling, and all the features.

And this is why satellite is losing customers

My sister lives on a gravel road out in the sticks and the coop is in progress of running fiber.

Sent from my SM-G955U1 using the SatelliteGuys app!

 

[Claude Greiner]

A small example of why AT&T needs to cut costs.
They started a 2 year discount promo for Directv in June 2016 and it has been rolling off to 1 year deals with a corresponding loss of those customers experiencing sticker shock when their bill jumped.
The next quarterly report will likely continue to show a brutal lose in customers.

View attachment 136707

They really never had 2 year pricing unless the customer had 2 AT&T products and services.

The problem is that most wanted internet and either the speeds where too slow or AT&T didn’t offer internet in the area.

They went to the 1 year promos because it was pissing off potential customers who either didn’t qualify, couldn’t get or didn’t want 2 AT&T products.

The fact of the matter is Directv really needs to get 2 year pricing.

 

[bobvick]

And this is why satellite is losing customers

My sister lives on a gravel road out in the sticks and the coop is in progress of running fiber.

Sent from my SM-G955U1 using the SatelliteGuys app!

Where is your sister located?

The gravel road, sounds like here, but ours is paved However, this road is about four miles long between two State highways, there’s probably not more than 10 homes on the whole road, and now we can all get gigabit fiber. Never ever thought I’d see it here in my lifetime. A pleasant surprise though.

 

[nelson61]

Where is your sister located?

The gravel road, sounds like here, but ours is paved However, this road is about four miles long between two State highways, there’s probably not more than 10 homes on the whole road, and now we can all get gigabit fiber. Never ever thought I’d see it here in my lifetime. A pleasant surprise though.

Northern Minnesota

Sent from my SM-G955U1 using the SatelliteGuys app!

 

[slice1900]

I guess some of the big subscriber gains we saw a few years ago

Where is your sister located?

The gravel road, sounds like here, but ours is paved However, this road is about four miles long between two State highways, there’s probably not more than 10 homes on the whole road, and now we can all get gigabit fiber. Never ever thought I’d see it here in my lifetime. A pleasant surprise though.

Sometimes you are lucky in rural areas - they have to run fiber to cell towers and if you happen to live on the path that fiber takes getting there you are in luck while someone that lives on a road a half mile away might have no wired options at all.

 

[nelson61]

I guess some of the big subscriber gains we saw a few years ago


Sometimes you are lucky in rural areas - they have to run fiber to cell towers and if you happen to live on the path that fiber takes getting there you are in luck while someone that lives on a road a half mile away might have no wired options at all.

The REA Cooperatives are repeating what they did in the 1930s and 40s. It's a good model to bring modern utilities to rural areas.

Sent from my SM-G955U1 using the SatelliteGuys app!

 

[slice1900]

The REA Cooperatives are repeating what they did in the 1930s and 40s. It's a good model to bring modern utilities to rural areas.

Sent from my SM-G955U1 using the SatelliteGuys app!

If you are lucky enough to have a forward thinking electric cooperative, that's great. AT&T's AirGig technology should make it a lot easier for RECs to provide internet to their customers without the up front investment, though you have to pay the profit margin (for AT&T) which isn't a factor with a cooperative which you are part owner of.

 

[Inclined Orbit]

After separation from your company you have 60 days to roll your 401k into an IRA or whatever without penalty, otherwise you incur a penalty.

About the so-called "59.5" rule for 401k's: There's a NICE exception you may not be aware of, that applied to me. IF you are OVER age 55, and lose your job due to a "separation of service" IE: R.I.F.(reduction in force) Reorg, etc, you are allowed to immediately (if needed) start taking 401k withdrawals from THAT companies 401k that you are vested in, and only pay regular income taxes at whatever your bracket is at that time. There's NO additional 10% penalty, even though you may be getting that money before the normal 59.5 year age.

This rule does NOT apply if you "roll-over" any of that 401k to another 401k, or IRA. So be aware of that, if you'll have need to tap that money source. Don't roll it over, or the 59.5 rule applies again!

 

[primestar31]

After separation from your company you have 60 days to roll your 401k into an IRA or whatever without penalty, otherwise you incur a penalty.

Not everybody HAS to roll over their 401k. Some people can keep it right there, if the company they are leaving allows that. In my case, I left it and it's doing very well, I just can't contribute to it anymore.

 

[slice1900]

AFAIK you can roll your 401K at any time. The 60 day rule is a limit on how long you have after taking a distribution from your 401K to place it in an IRA. I just rolled over a 401K from a company I worked at many years ago to an IRA, and from there into another 401K (Fidelity wouldn't let me go directly from 401K to 401K for whatever reason) so I could consolidate things.