Verizon to Cut 7,000 Jobs Through Buyouts
{{#rendered}} {{/rendered}}Local telephone company Verizon Communications said Wednesday it cut 7,000 union jobs, or about 2.7 percent of its work force, in December through a voluntary buyout offer.
"We've already taken the force reductions up front" in an effort to cut costs, Verizon co-Chief Executive Ivan Seidenberg told the Salomon Smith Barney 12th Annual Entertainment, Media and Telecommunications Conference in Scottsdale, Arizona.
Verizon made the buyout plan available to hourly, union workers in its core telephone business.
{{#rendered}} {{/rendered}}Verizon Wireless, the No. 1 U.S. wireless telephone company, is a joint venture of New York-based Verizon and Britain's Vodafone Group Plc.
Seidenberg did not elaborate about the cost of the buyout program or severance packages. Verizon previously cut about 7,500 jobs in the first three quarters of 2001 and had about 256,000 workers as of Sept. 30.
A spokesman for Verizon said the company would provide an update on its staffing levels when it releases its fourth-quarter earnings report at the end of the month
{{#rendered}} {{/rendered}}Verizon also said it is in "no rush" to proceed with an initial public offering of its Verizon Wireless joint venture, citing weakness in wireless stocks and the collapse of a deal to buy wireless licenses.
"The reasons behind why we wanted to do the IPO changed," Seidenberg said.
Verizon and other telephone companies bid $15.85 billion for wireless licenses almost a year ago, but that sale was thrown into chaos.
{{#rendered}} {{/rendered}}A federal appeals court said the Federal Communications Commission (FCC) could not repossess and re-auction the airwaves from NextWave Telecom Inc. when that company failed to make timely payments. A deal to distribute the NextWave licenses collapsed when Congress failed to pass authorizing legislation by Dec. 31.
Due to the collapse of the NextWave deal, Verizon Wireless does not "have the pressure to raise money," Seidenberg said. Also, recent weakness in the valuation of wireless telephone stocks may make an IPO ill-timed at the moment.
Verizon Wireless had planned to launch its IPO in 2000, but it postponed those plans, citing the slowdown in the economy and unfavorable market conditions. In November, Verizon Wireless said it aimed to complete the IPO, which analysts estimated could raise about $5 billion, by mid-2002.