Following the recent overhaul of its wireless data plans, Verizon has announced upcoming “restructuring” and “streamlining” measures that are expected to result in significant layoffs. The company held a meeting with a wide audience of customer service employees to notify them of the news. Although more details are expected to be announced on May 25th, the consolidation measures could impact numbers far beyond the 6,000 employees present on the call.
Verizon’s Q1 ’23 Earnings and CEO Appointment
Verizon’s warning comes just a month after the company posted Q1 ’23 earnings, which fell short of Wall Street estimates as its subscriber base continued to shrink. The company lost 127,000 postpaid subscribers in the quarter. In March, Verizon appointed Sowmyanarayan Sampath as CEO of Verizon Consumer Group, which oversees its customer service operation.
Options for Affected Workers
Those involved in the recent call were told they could either accept a severance offer (two weeks per year of tenure) or apply for roles to “transition to the next stage of your career journey” in customer experience, loyalty, or technology positions. However, those who apply for new positions are not guaranteed to be hired. Affected workers have until June 7th to make a decision on their preference, and June 23rd is the date that Verizon will inform employees of their future at the company.
Possible Outsourcing and Industry Trends
Some are speculating that the company is making these moves to shift more after-sales service and customer assistance to outside vendors overseas. Verizon has largely halted domestic hiring for customer service positions. The recent developments come as carriers are facing stagnant revenues and are trying to monetize 5G in any way they can after years of hyping the faster network technology. Verizon has said it plans to flip the switch on C-band spectrum in more areas throughout the country over the coming months.
Verizon’s recent restructuring measures and possible layoffs come as a result of its recent earnings, subscriber base decline, and industry trends towards outsourcing. Affected workers have been given options to either accept severance or apply for new positions, but those who apply are not guaranteed to be hired. Verizon’s future plans remain uncertain, and the company has yet to release more details on the upcoming restructuring.