Verizon says goodbye to almost 7% of workers

Finance earnings stock ticker graph
Verizon's shares have been rising this year. (Getty/monsitj)

Verizon announced this morning that 10,400 of its 152,300 employees agreed to leave the company as part of Verizon’s cost-cutting efforts.

“These changes are well-planned and anticipated, and they will be seamless to our customers. This is a moment in time, given our financial and operational strength, to begin to better serve customers with more agility, speed and flexibility,” Verizon CEO Hans Vestberg said in a release from the company.

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Interestingly, Verizon sought to match the news with its newfound laser focus on 5G.

“This program coincides with Verizon’s recently announced realigned organization structure designed to optimize growth opportunities in the 5G era,” the company said in its release.

Verizon noted that its voluntary separation program, launched in September, offers up to 60 weeks’ salary, bonus and benefits, depending on length of service. Employees who chose to volunteer were notified today whether they were accepted and their last date on payroll—either year-end 2018, or the end of March 2019 or June 2019, depending on the needs of the business.

The separation program is part of Verizon’s efforts to cut up to $10 billion in costs from its business by 2021. That cost-cutting effort spans Verizon’s business, and now includes the voluntary departure of roughly 6.8% of the company’s total workforce.

Of course, Verizon is working to cut costs in other parts of its business as well. For example, Verizon said in October it will spend less on its network this year than it initially expected. Specifically, the operator said it now expects to spend a total of between $16.8 billion and $17 billion on its network during the course of 2018—that range is down notably from the $17 billion to $17.8 billion the operator said at the beginning of this year it expected to spend during 2018.

Wall Street investors, for their part, have largely cheered Verizon’s actions. For example, the analysts at Morgan Stanley Research raised their price target on Verizon after the company released its third-quarter results, and Verizon’s shares have been steadily rising in value since the beginning of this year. They are currently hovering around $57 per share.

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