David Shepardson and Harshita Mary Varghese
WASHINGTON (Reuters) – Verizon’s new chief executive plans to cut about 15,000 jobs in the biggest layoffs ever at a U.S. telecom company, a person familiar with the matter told Reuters on Thursday, outlining some of the chief executive’s first efforts to restructure in the face of increasing competition.
The wireless carrier is facing increasing market pressure amid concerns about declining new customers as older rivals offer cheaper plans and cable operators enter the fray.
A Verizon spokesman declined to comment.
The layoffs, which affect about 15% of Verizon’s workforce, are expected to take place next week and follow years of efforts to cut jobs and cut costs, the person said.
The cuts will reduce the number of non-union executives by more than 20%, and Verizon also plans to franchise about 180 company-owned retail stores, the source added.
In early October, Verizon CEO Dan Schulman was appointed to lead PayPal as rivals AT&T and T-Mobile ramped up advertising, particularly with the release of new iPhone models, aggressive discounts and trade-in deals to retain subscribers and attract new customers.
Verizon needs aggressive changes, including a “cost transformation, fundamentally reshaping our cost base,” Schulman said last month. “We will be a simpler, leaner and less expensive business.”
Verizon added just 44,000 monthly bill-paying wireless subscribers in the third quarter, trailing AT&T. T-Mobile led the way with more than 1 million subscribers.
Cable operators like Comcast and Charter are shaking up the wireless market by bundling cellular plans with high-speed Internet.
Verizon shares rose about 1.5 percent on the news. They’ve largely stagnated over the past three years, up 8% compared to the S&P 500’s nearly 70% rise.
Schulman, a Verizon board member for seven years, said he doesn’t want to raise prices and wants to be more customer-centric. Verizon maintains the highest prices in the industry.
“Our financial growth has been too dependent on price growth, and a strategic approach that is too dependent on price without subscriber growth is not a sustainable strategy,” he said last month.
in 2024 Verizon had about 100,000 U.S. employees at the end of the year, after shedding nearly 20,000 workers over three years. Last year, Verizon announced 4,800 layoffs as part of a voluntary program, taking nearly $2 billion in layoffs.