The nation’s largest wireless network operator is looking to further reduce costs by encouraging some employees to retire early. As noted by The Wall Street Journal, the company is offering new early-retirement packages to “thousands” of employees.
As the report noted, the new offer, launched Monday, provides three weeks of pay for each year the employee has been with Verizon. It’s the first such package Verizon has offered in 13 years.
It’s unclear how many employees will avail themselves of the offer, but it’s another element in Verizon’s attempts to reduce total costs by $10 billion by 2021. That cost-cutting effort spans the entire company, from its network build-out to its moves toward software-powered, virtualized equipment.
At the end of last year, Verizon counted 155,400 employees—less than the 252,000 workers employed by AT&T at that time but far more than the 51,000 employed by T-Mobile and the 30,000 people employed by Sprint.
But Verizon’s workforce has been shrinking during the past several years. Verizon employed 160,900 people at the end of 2016, and fully 177,700 at the end of 2015. Indeed, Verizon has reduced its workforce by more than 2,000 people during the course of 2018, ending its June quarter with 153,100 employees.
Verizon’s actions also come amid some Wall Street downgrades. In recent weeks Barclays analyst Kannan Venkateshwar downgraded Verizon’s stock from “overweight” to “equal weight,” the same morning that MoffettNathanson analyst Craig Moffett similarly downgraded Verizon stock to “neutral” from “buy.”
However, both analysts noted that their downgrades reflect the fact that they generally believe Verizon’s full value is already reflected in the company’s stock price. “While we are optimistic about Verizon’s near term growth trajectory, we believe this is already reflected in valuations,” wrote the analysts at Barclays in a recent research note. “Verizon today is the only major distributor that has the balance sheet and therefore strategic optionality to pivot in whatever direction it so chooses. Looking out over the next couple of years, the only buyer remaining for media, cable or spectrum assets is likely to be Verizon.”
Verizon, for its part, has been moving full steam ahead toward 5G under the leadership of new CEO Hans Vestberg. The company earlier this month launched its 5G Home service and said it plans to launch mobile 5G services in the coming months.