Verizon to cut about 15,000 jobs as new CEO restructures, source says

By David Shepardson and Harshita Mary Varghese WASHINGTON (Reuters) -Verizon's new CEO is planning to cut about 15,000 jobs in the U.S. telecommunications company's largest ever layoffs, a person familiar with the matter told Reuters on Thursday, outlining some of the executive's first efforts to restructure in the face of rising competition. The wireless carrier faces mounting market pressure amid concerns over a shrinking pool of new customers as older rivals offer cheaper plans and cable operators jump into the fray. A Verizon spokesperson declined to comment. The layoffs, affecting about 15% of Verizon's workforce, are set to take place as soon as next week, the person said, and follow years of efforts to cut jobs and costs. The cuts will reduce non-union management ranks by more than 20% and Verizon also plans to turn about 180 corporate-owned retail stores into franchised operations, the source added. Verizon CEO Dan Schulman was appointed in early October, arriving from the helm at PayPal as promotions by rivals AT&T and T-Mobile have intensified, particularly around the launch of new iPhone models, with aggressive discounts and trade-in deals to retain subscribers and win new customers. Verizon needs aggressive change including "cost transformation, fundamentally restructuring our expense base," Schulman said last month. "We will be a simpler, leaner and scrappier business." Verizon added just 44,000 monthly bill-paying wireless subscribers in the third quarter, lagging AT&T. T-Mobile led with more than 1 million net subscriber additions. Cable operators like Comcast and Charter are shaking up the wireless market by bundling mobile plans with high-speed internet. Verizon's shares rose about 1.5% on the news. They have largely stagnated over the last three years, with a gain of 8% compared with the S&P 500's near-70% rise. Schulman, a Verizon board member for seven years, has said he does not want to hike prices and seeks to be more customer-focused. Verizon maintains the highest prices in the sector. "Our financial growth has relied too heavily on price increases, a strategic approach that relies too much on price without subscriber growth is not a sustainable strategy," he said last month. Verizon had about 100,000 U.S. employees at the end of 2024, after cutting almost 20,000 over three years. Last year it announced a reduction of 4,800 employees through a voluntary program and took a nearly $2 billion charge. In 2018, Verizon said about 10,400 employees would leave under a prior voluntary exit program. Craig Moffett, senior analyst at MoffettNathanson, said the new CEO's first commitment was to stop losing customers, which would require subsidizing expensive handsets for a huge number of Verizon's subscribers. "The obvious question was how Verizon planned to pay for that. Now we know," Moffett said. "What we don't know is whether these cost reductions will actually help to offset the higher planned costs of retention" of customers, he added. Verizon spent $52 billion to acquire key wireless midband spectrum in a 2021 auction to boost its 5G network. Some analysts questioned if it paid too much. The company also struck a $20 billion deal to acquire Frontier Communications last year. It spent $6 billion to acquire prepaid mobile phone provider TracFone Wireless. The Wall Street Journal reported the cuts earlier. (Reporting by Harshita Mary Varghese in Bengaluru and David Shepardson in Washington; Editing by Shilpi Majumdar, Richard Chang and Peter Henderson)

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