Verizon Wields Ax Again

With competition for its local phone customers coming from long-distance service providers, wireless telcos and even cable companies, the Bells' lucrative monopolies have withered.

Verizon hasn't exactly helped itself throughout the past three years of turmoil. The company had racked up more than $64 billion in debt around the turn of the century and has only recently reduced that mammoth total to slightly more than $45 billion. Verizon also had the two highest-paid executives last year, with the now retired Chuck Lee raking in $15.6 million and CEO Ivan Seidenberg pulling down $9.5 million.

With 221,000 employees, Verizon is not only the largest telco -- it has also taken the proportionally smallest workforce cuts in the past three years, judging by its Baby Bell peer group.

Verizon is expected to take a hefty one-time charge for the severance payouts, but investors say the cost savings will go right to the bottom line, as older employees toward the top of their pay scales go away or get replaced by lower-paid new hires.

Verizon employees have until Friday to decide whether to take the buyout, which consists of a 5% increase to their pension total, two weeks of additional pay for every year served, a cash bonus between $15,000 and $30,000, and one year of medical coverage.

Last month, on an earnings conference call, CEO Seidenberg said 12,000 managers and union staff already had taken the offer.

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