In short: Verizon offered an early-retirement package to eligible employees for the first time in almost fifteen years, a company spokesperson confirmed earlier this week. The offer is part of a wider corporate effort aimed at cutting costs but has only been made to management employees and it remains to be seen whether it will eventually extend to those in sales. The largest wireless carrier in the United States is willing to provide eligible workers with a three-week pay for every year of service, having described the severance package as “employee-friendly.” Stateside unions are yet to comment on the offer.
Background: Verizon has been trimming its workforce since 2011; the company had approximately 153,000 employees in the second quarter of this year, 42,000 down compared to seven years ago, according to its consolidated financial reports. The company also laid off over 2,000 employees following its acquisition of Yahoo and its subsequent combination with AOL into a unit that’s now called Oath. Approximately a year ago, the company announced plans to drop thousands of roaming customers in order to cut costs and save $10 billion with virtualization. Combined with the massive tax cut Congress approved last year, Verizon is on the road of running a much tighter ship in the future.
Impact: Verizon’s cost-cutting efforts are significant in that they help keep investors happy during a period of massive, unavoidable investments in the fifth generation of mobile networks. The company’s seminal 5G service is launching on October 1 but is set to offer fixed wireless access to the new connectivity standard, meaning it will be a broadband alternative with limited money-making potential. The industry will only unlock true wireless revenues with mobile 5G which is still at least two years away from large-scale availability in the U.S., making Verizon’s current cost-cutting efforts that much more important for balancing the company’s debt.