is getting into fighting trim just as the holiday season arrives.
The nation's leading telco said Monday that 21,000 workers had accepted its buyout offer and will leave the payroll next week. The move comes as Verizon, forced to slash expenses by fierce competition in the telecom business, seeks to reassure testy investors and consolidate its strong gains in the fast-growing wireless area.
"This allows us to further control our destiny," President Larry Babbio told investors and analysts gathered at the UBS eighth annual Global Communications Conference. "We can now shift our resources to growth areas."
Verizon shares, which have fallen more than 10% this year as Wall Street frets over erosion of the company's local phone business, rose 12 cents in early Monday action, to $32.73.
The workers accepting the buyout offer include 16,000 management employees and 5,000 union members, Verizon said. The company will take an undisclosed fourth-quarter charge to cover severance pay and pension adjustments. The cutbacks will trim the New York phone giant's workforce by about 10%.
The payroll cutback comes in a time of belt-tightening in the telecommunications industry, which has been hit hard by the rise of wireless services. As
reported last week, Verizon had expected
as many as 22,000 workers to accept the buyout offer, which targeted better-paid and more senior workers.
Last Thursday, San Antonio telco
said it too would "accelerate" the pace of its job-cutting efforts in coming periods, mostly through attrition.
The company told Wall Street that it expected "productivity and customer service improvement initiatives" to "save $1.3 billion in annual expenses and capital costs by 2006."
Also last week, Atlanta-based
told analysts it will cut $500 million in costs next year and an added $600 million in 2005. Though BellSouth executives did not share specifics, they did say they would look at a range of areas, including contractors and staff, to make the necessary reductions.
Taken as a whole, the telecom industry has shed about 380,000 jobs during the downturn -- a gargantuan figure until you consider that it added some 500,000 between 1996 and 2000.
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.