Verizon, America's largest wireless carrier, is preparing for the most significant round of layoffs in its history, with plans to cut approximately 15,000 jobs. This drastic move comes as the telecoms behemoth battles a severe exodus of customers and intensifying competition in the wireless and home-internet markets.
A Perfect Storm of Customer Loss and Competition
The job cuts are scheduled to roll out within the next week and will occur primarily through direct layoffs, as first reported by the Wall Street Journal. For a company that employs around 100,000 people, this represents a substantial reduction of its workforce. In a parallel cost-cutting measure, Verizon also intends to spin off roughly 200 of its retail stores into franchises, a move that will shift those workers off the company's direct payroll.
This upheaval follows a disastrous period for the telecoms giant, which has been haemorrhaging lucrative postpaid phone customers for three consecutive quarters. The aggressive promotions from rivals T-Mobile and AT&T have sharply contrasted with Verizon's own strategy. Once known for its substantial holiday promotions, Verizon notably pulled back after Christmas last year, a decision that backfired spectacularly as frustrated customers defected to cheaper competitors.
Financial Fallout and New Leadership
The scale of the customer loss is staggering. In April, Verizon admitted it lost a monumental 289,000 monthly wireless customers in the first quarter alone. This figure is more than double the losses from the same period last year and was far worse than Wall Street had anticipated. The company explained to investors that this exodus 'reflects the impact of recent pricing actions,' a direct reference to its decision to raise rates and scale back on discounts.
The strategic shake-up arrives just weeks after Verizon appointed a new chief executive, Daniel Schulman, the former boss of PayPal and Virgin Mobile USA. Schulman has vowed to overhaul the business, reverse the steady decline in wireless subscribers, and implement severe cost reductions across the board.
'We have a tremendous amount of opportunity to be more efficient, to be scrappier,' Schulman stated last month while discussing the company's third-quarter results. He left no room for ambiguity about the path forward, declaring, 'Cost reductions will be a way of life for us here.' The planned layoffs are the most potent signal yet of his commitment to that philosophy.
