Verizon job losses after Q2 results
July 28th, 2009 - 12:29 am ICT by John Le FevreA second-quarter profit drop of 21 percent will see more than 8,000 Verizon employees lose their jobs in its wireline business before the end of this year.
The company announced the planned retrenchments as the costs of operating the wireline business failed to keep pace with plummeting revenue.
Verizon ended the quarter with 235,000 employees, a six thousand employee decrease in the last year, despite cutting 8,000 jobs during the same period.
In the past Verizon has balanced layoffs in wireline with hiring in wireless, but chief operating officer Denny Strigl said that would not be the case this time.
Verizon announced its Q2 figures on Monday and said demand for cell phones and its new home TV service were holding up well in the recession.
The company reported total earnings of $1.48 billion, down from $1.88 billion a year ago, while revenue rose 11 percent to $26.86 billion from $24.1 billion over the same period. The operating margin declined to 4.8 percent from 8.8 percent for the same period in 2008.
Verizon shares fell $0.83, or 2.6 percent, to $30.67 in midday trade, despite the company’s wireless division announcing last week that it had added more than one million customers to end the quarter with 87.7 million, ahead of AT&T’s 79.6 million.
Strigl told investors and analysts that he expects Verizon Wireless to stay competitive by introducing new phones, including a second version of the BlackBerry Storm and devices from Motorola Inc. running Google Inc.’s Android software.
He also said Verizon Wireless will have Palm Inc.’s Pre phone early next year. The phone is currently exclusive to Sprint Nextel Corp., and it had been unclear when it would be in Verizon stores.
Before the end of the year it will sell some of its own and Alltel’s operations in 79 mainly rural areas to AT&T for $2.35 billion, to satisfy regulatory requirements and all local-phone operations in 13 states to Frontier Communications Corp.
According to Strigl, Verizon will, “probably will not have large-scale hiring until we’re out of the recession”.
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Tags: alltel, chief operating officer, communications corp, denny strigl, frontier communications, google, google inc, home tv, layoffs, motorola inc, operating margin, palm inc, profit drop, q2 results, quarter profit, regulatory requirements, sprint nextel, tv service, verizon employees, verizon wireless