In a dramatic move to streamline its operations, US telecoms giant Verizon is preparing to slash approximately 15,000 jobs, marking the company's most significant round of layoffs to date.
The cuts, which represent about 15% of its total workforce, are set to commence as early as next week, according to a source familiar with the matter. This restructuring follows the appointment of former PayPal chief Dan Schulman as CEO in early October.
A Leaner Corporate Structure
The job reductions are primarily targeted at Verizon's non-union management ranks, with expectations that more than 20% of that segment of the workforce will be affected. In a parallel cost-cutting measure, the company also intends to transition around 180 corporate-owned retail stores into franchised operations.
A Verizon spokesperson declined to comment on the plans. The news, however, was welcomed by investors, with the company's shares rising about 1.4% following the announcement. This uptick comes against a backdrop of three years of relative stagnation for the stock, which has seen a mere 8% gain compared to the S&P 500's near-70% surge.
Battling a Saturated Market
This aggressive restructuring is Verizon's response to mounting pressures in the US wireless market. The company faces intense competition from rivals AT&T and T-Mobile as subscriber growth slows and consumers become more cautious about purchasing premium wireless plans.
Last month, CEO Dan Schulman acknowledged the need for radical change, stating the company would embark on a "cost transformation, fundamentally restructuring our expense base." He vowed that Verizon would become a "simpler, leaner and scrappier business."
Schulman, who has served on Verizon's board for seven years, has also signalled a strategic shift away from relying on price hikes, a model he has deemed unsustainable. "Our financial growth has relied too heavily on price increases," he said, emphasising a new focus on customer retention.
Paying for Customer Retention
Analysts see the layoffs as a direct response to the financial burden of keeping subscribers. Craig Moffett, a senior analyst at MoffettNathanson, noted that the new CEO's priority is to "stop the bleeding from subscriber churn," which would require subsidising expensive handsets for a vast number of customers to prevent them from leaving.
"The obvious question was how Verizon planned to pay for that. Now we know," Moffett stated. "What we don't know is whether these cost reductions will actually help to offset the higher planned costs of retention."
This is not the first time Verizon has trimmed its workforce. The company, which had about 100,000 US employees at the end of 2024, had already cut almost 20,000 jobs over the preceding three years. The latest cuts follow a series of major financial outlays, including a $52 billion spend on C-Band spectrum in 2021 and a $20 billion deal to acquire Frontier Communications last year.
