Monday, December 10, 2018

Verizon Says Goodbye to 10,400 Workers; Company Will Slash $10 Billion in Costs

Despite a strong economy, Verizon Communications will shed 10,400 employees and cut $10 billion in costs as part of a transformation initiative promoted by the company’s newest top executive.

“These changes are well-planned and anticipated, and they will be seamless to our customers,” said Verizon CEO Hans Vestberg. “This is a moment in time, given our financial and operational strength, to begin to better serve customers with more agility, speed and flexibility.”

For Andrew Challenger, vice president of Challenger, Gray & Christmas, an outplacement firm that closely monitors corporate layoffs, Verizon’s willingness to let go of 7% of their workforce is an ominous sign of possible additional job reductions in the future.

Vestberg has advocated reorienting Verizon towards a potentially lucrative 5G wireless future. The estimated $10 billion in cost savings could placate investors on Wall Street alarmed about increased spending Verizon is likely to undertake to deploy 5G infrastructure over the next five years.

In October, Verizon offered more than 44,000 employees a voluntary buyout package and announced it would transfer thousands of current employees to Infosys, an outsourcing company headquartered in India. The voluntary separation package included up to 60 weeks’ salary, bonus and benefits, depending on length of service. This morning, accepted participants received word of their last day of employment, which will be the last day of this year or at the end of March or June, 2019. Verizon currently has 152,300 employees.

Challenger believes Verizon is likely to continue letting employees go as the company faces ongoing pressures on its landline and business service units and endures cord-cutting for its FiOS fiber to the home service. Challenger told CNBC the 44,000 workers who took Verizon’s offer likely made a smart decision. Companies that offer voluntary buyouts in good times can be a sign of likely layoffs when the economy slows down. With record low unemployment, the Verizon workers leaving the telecom company are likely to find new jobs much easier than those forced to look during a recession.

Verizon employees transferred to Infosys may be among the next to be targeted in future layoffs, according to Challenger. Verizon workers will be working closely with low-paid Indian staffers who may eventually replace them.

Workers who are assigned to train cheaper workers should keep their eyes open and resumes ready, Challenger warned.

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Thanks to Phillip Dampier (see source)

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