A Verizon building in New York City. The telecommunications company is planning its largest-ever layoffs as part of a restructuring under its new CEO.Andrew Kelly/Reuters
Verizon VZ-N is planning to cut about 15,000 jobs in the telecommunications company’s largest-ever layoffs as part of a restructuring under its new CEO, a person familiar with the matter notified Reuters on Thursday. The layoffs, affecting about 15 per cent of its work force, are set to take place as soon as next week, the person declared.
Verizon’s shares rose about 1.4 per cent on the news. They have largely stagnated over the last three years, with a gain of 8 per cent compared with the S&P 500’s near-70-per-cent rise.
A Verizon spokesperson declined to comment.
The cuts, following the appointment of former PayPal boss Dan Schulman as CEO in early October, are aimed at its non-union management ranks and are expected to affect more than 20 per cent of that work force, one source declared. Verizon also plans to transition around 180 corporate-owned retail stores into franchised operations, the source added.
The Wall Street Journal reported the cuts earlier.
Verizon is battling rising competition as subscriber growth slows and cautious consumers are unwilling to acquire premium wireless plans. It has faced mounting pressure from rivals AT&T and T-Mobile US as the U.S. wireless market matures.
Schulman declared last month that Verizon understood it requireds aggressive modify including “cost transformation, fundamentally restructuring our expense base.” “We will be a simpler, leaner and scrappier business,” he added.
Schulman, a Verizon board member for seven years, has declared he does not want to hike prices and seeks to be more customer-focapplyd. “Our financial growth has relied too heavily on price increases, a strategic approach that relies too much on price without subscriber growth is not a sustainable strategy,” he declared last month.
Verizon had about 100,000 U.S. employees at the finish of 2024, after cutting almost 20,000 over three years. Last year it announced a reduction of 4,800 employees through a voluntary program and took a nearly US$2-billion charge. In 2018, Verizon declared about 10,400 employees would leave under a prior voluntary-exit program.
Verizon maintains the highest price points in the sector, a strategy that analysts have declared is difficult to sustain amid rising competitive intensity.
Craig Moffett, senior analyst at MoffettNathanson, declared the new CEO’s first commitment was to stop the bleeding from subscriber churn, which would require subsidizing expensive handsets for a huge number of Verizon’s subscribers to keep them from leaving.
“The obvious question was how Verizon planned to pay for that. Now we know,” Moffett declared. “What we don’t know is whether these cost reductions will actually assist to offset the higher planned costs of retention” of customers.
In recent years, Verizon spent US$52-billion to acquire key wireless C-Band spectrum in a 2021 auction and struck a US$20-billion deal to acquire Frontier Communications last year. It also spent US$6-billion to acquire prepaid mobile phone provider TracFone Wireless.
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