Telecommunications giant Verizon is implementing a significant restructuring, announcing the layoff of over 13,000 employees as it seeks to “reorient” its entire company.
Verizon also said it plans to convert 179 corporate-owned retail stores into franchised operations and close one store.
The job cuts commenced on Thursday, according to an internal staff memo from Verizon CEO Dan Schulman, which was obtained by The Associated Press. In the communication, Schulman highlighted that Verizon’s existing cost structure was impeding its capacity to invest, specifically in enhancing customer experiences.
“We must reorient our entire company around delivering for and delighting our customers,” Schulman wrote.
He further explained the necessity to streamline operations “to address the complexity and friction that slow us down and frustrate our customers.”
In addition to the workforce reductions, the New York-based company intends to “significantly reduce” its outsourced and other external labour expenses.
It was reported last week that Verizon was planning to cut around 15,000 jobs. The cuts, following the appointment of former PayPal boss Schulman as CEO in early October, were aimed at its non-union management ranks and are expected to affect more than 20% of that workforce, one source said at the time.
Schulman, a Verizon board member for seven years, has said he does not want to hike prices and seeks to be more customer-focused. “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 said last month.
Verizon maintains the highest price points in the sector, a strategy that analysts have said is difficult to sustain amid rising competitive intensity.
Craig Moffett, senior analyst at MoffettNathanson, said 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.
