Verizon offers voluntary severance packages to departing employees
First announced in September, US-based telecommunications company Verizon has confirmed that 10,400 management employees, or around 7% of its workforce, have accepted voluntary buyout deals, out of 44,000 eligible employees.
Nearly half of the 10,400 will leave the company by end of year, and the rest by June 2019.
Verizon also said it will “record a severance charge in the range of $1.8 billion to $2.1 billion” in the last quarter of 2018, mostly due to the voluntary buyouts, “but also as a result of other headcount reduction initiatives.”
Additionally, it will transfer over 2,500 IT staff – although sources have quoted closer to 5,000 workers – to India-headquartered Infosys in a US$700 million outsourcing deal.
As part of what the telecom giant is calling a “voluntary separation program,” the move is part of cost cutting measures, as it realigns to focus efforts on leveraging on growth opportunities related to next-gen 5G wireless, and to “better serve customers with more agility, speed and flexibility.”
“These changes are well-planned and anticipated, and they will be seamless to our customers,” said Verizon CEO Hans Vestberg.
“This is a moment in time, given our financial and operational strength, to begin to better serve customers with more agility, speed and flexibility.”
“For those who were accepted, the coming weeks and months will be a transition. For the entire V Team, there will be opportunities to work differently as we prepare for the great things to come at Verizon. Together, we are leading the world during this great technological revolution, and we will continue to lead the way,” Vestberg noted in a letter to employees.
Verizon’s generous severance package mostly targets long-time employees working more than 30 years at the organisation. The Voluntary Separation Program will offer up to 60 weeks’ salary, bonus and benefits, “depending on length of service”.
The layoffs and transfers are part of a four year plan to save the largest US wireless carrier US$10 billion by 2021.
The company had 152,300 employees at the end of third-quarter 2018.