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21,000 Verizon Workers Take Buyout
That's far more than the nation's biggest telephone company estimated last month would accept the deal.
November 18, 2003
3 Min Read
NEW YORK (AP) -- About 21,600 employees accepted a buyout offer from Verizon Communications and will leave the payroll by the end of the week, nearly double the number that the nation's biggest telephone company estimated last month.
The employees include 5,600 union workers and about 16,000 non-union managers and administrative staff.
The final count far exceeds Verizon's estimate last month that more than 12,000 of the 152,000 workers who were offered the buyout were expected to accept the deal.
The buyout, which was not offered to Verizon Wireless' nearly all-non-union staff of 40,000, was designed to help accelerate cost-cutting in the company's shrinking residential telephone business.
"We had a very good rate of volunteers for a variety of reasons," including a lump-sum payment option and an enhanced pension benefit, said Peter Thonis, a Verizon spokesman. He also noted that the 21,600 voluntary departures exceeds the estimated 15,000 employees who might have been expected to retire or quit over the next two years under normal attrition.
"This drew forward many of the people who would have left anyway over the next few years," said Thonis. "It reduces the need for involuntary reductions because the cost structure is coming better in line."
At an investor conference Monday morning, Verizon vice chairman and president Lawrence T. Babbio Jr. said the company is still analyzing data to determine the accounting charge the company needs to record in the fourth quarter to cover the expense of the severance packages.
Babbio also said Verizon will fill a small percentage of the vacancies, but most of the workload shouldered by the departing employees can be handled through productivity improvements.
Like many traditional telephone companies, Verizon is beset by a litany of forces that are eating away at its core business of connecting voice calls to homes and businesses.
In addition to technological alternatives like mobile phones, E-mail, and Internet-based phone services, Verizon has lost some major battles in the regulatory arena.
A recent ruling by the Federal Communications Commission ensures that rivals such as AT&T and MCI will be allowed to sell their own residential phone service by leasing local lines from Verizon and the other Bell monopolies at attractive rates set by state regulators.
A lawsuit by the Bells challenging the new FCC rules is expected to proceed early next year in the U.S. Court of Appeals for the District of Columbia, which handled a previous case on the same matter.
The Bells charge that the FCC's decision to delegate authority to state regulators violates the court's ruling. The Washington court has previously ruled that the FCC has been too permissive in this area.
The buyout package was offered to 78,000 union technicians and call-center operators in the Northeast and Mid-Atlantic, as well as all 74,000 non-union workers throughout the company's non-wireless operations.
No buyouts were offered in the fast-growing Verizon Wireless business, which is 55 percent owned by Verizon and 45 percent owned by Vodafone PLC of Britain.
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