American telecommunications company Verizon is considering laying off around 15,000 of its staff as part of the restructuring process. This massive layoff is considered the largest in US telecommunications company history.
Media reports say that the layoffs are set to take place as soon as next week. It further added that the firm is facing mounting market pressure over a shrinking pool of new customers.
The layoffs would affect about 15 per cent of Verizon’s workforce and would reduce non-union management ranks by more than 20 per cent. Not only this, Verizon is also planning to turn about 180 corporate-owned retail stores into franchised operations.
Why The Layoffs?
Appointed in early October, Verizon CEO Dan Schulman sees Verizon as competing with rivals AT&T and T-Mobile. This new planning is being done to retain subscribers and win new customers with aggressive discounts and trade-in deals, considering the launch of new iPhone models.
Earlier in October, Schulman had said that the firm requires aggressive change which includes cost transformation and fundamentally restructuring of expense base. He was of the opinion that Verizon needs to have a simpler, leaner and scrappier business.
He had added that Verizon’s financial growth has mostly relied on price increases and the subscribers growth has not been taken into aspect which framing a sustainable strategy.
In the third quarter of the financial year, Verizon added just 44,000 monthly bill-paying wireless subscribers, way behind AT&T. In the similar period, T-Mobile added more than 1 million net subscribers.
Schulman had been on the Verizon board for over seven years and is not in favour to hike prices. He wants the firm to be more customer-focused. It is to be known that Verizon maintains the highest prices in the telecommunications sector.
Among the competitors, Comcast and Charter are taking over the wireless market as they are bundling mobile plans with high-speed internet.
Previous Layoffs:
Over three years, Verizon had cutting almost 20,000 of its staff. It had 100,000 US employees at the end of 2024 and had announced a reduction of 4,800 employees through a voluntary program. They also took a nearly $2 billion charge.
Verizon in 2018 also said that about 10,400 employees would leave under a prior voluntary exit program.
Expert Cites Concern:
A senior analyst at MoffettNathanson, Craig Moffett, while expressing his conerns, said that the biggest challenge for Verizon is how they would subsidize handsets for a huge number of its customers. Also, he was concerned on how Verizon has planned to pay for that.
In 2021, Verizon spent $52 billion to acquire key wireless midband spectrum, aiming to boost its 5G network. In 2024, the firm struck a $20 billion deal to acquire Frontier Communications and also apent $6 billion to acquire prepaid mobile phone provider TracFone Wireless.
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