Verizon is gearing up for a significant reduction in its workforce, potentially cutting around 15,000 positions as early as next week, a source familiar with the situation revealed to Reuters. This move aligns with the company’s new CEO, Dan Schulman’s efforts to restructure operations amidst fierce competition and sluggish customer growth trends.
The planned job cuts, which equate to nearly 15% of Verizon’s workforce, are primarily targeted at non-union managerial roles. Additionally, the company intends to transition approximately 180 corporate-owned retail stores into franchise-operated establishments.
Intensifying competition from industry rivals like AT&T and T-Mobile, who are offering more affordable plans and aggressive promotions, has put pressure on Verizon. Moreover, cable providers such as Comcast and Charter are luring customers with bundled offerings that combine high-speed internet and mobile services.
Schulman emphasized the need for Verizon to undergo a “cost transformation” to streamline operations and enhance competitiveness. The company’s recent struggles in adding new wireless customers, with only 44,000 monthly bill-paying additions in the third quarter compared to competitors, further underscores the urgency for change.
Analysts point out that Verizon’s challenge lies in retaining customers and may involve subsidizing costly smartphones for many subscribers. The job cuts are part of the company’s strategy to offset these increased expenses, stemming from past investments such as the $52 billion spectrum acquisition to bolster its 5G network and other significant acquisitions like Frontier Communications and TracFone Wireless.
Over the past three years, Verizon has implemented various cost-saving initiatives that have resulted in nearly 20,000 job cuts. Last year alone, 4,800 employees opted for voluntary separation, costing the company close to $2 billion. This latest round of layoffs signifies Verizon’s ongoing efforts to adapt to market challenges and enhance operational efficiency.