Thousands of employees are taking Verizon up on its offer to leave the company.
The buyouts, which were announced on Monday, represent roughly 7 percent of Verizon’s workforce. The company first announced the plan to decrease its staff members to help the company’s foray into 5G.
Verizon put this offer on the table in September with a goal to save $10 billion in cash by 2021. The offer, which included 60 weeks of salary bonus and benefits depending on length of service, applied to 44,000 employees across Verizon’s business.
“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.”
In a letter to employees, Vestberg noted, “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.”
Thousands of employees saw the terms of Verizon’s buyout offer in a positive light, but an expert also said the current jobs market and employment outlook helped make it more attractive.
… The unemployment rate is now 3.7%, compared to 5.8% when Verizon last offered buyouts, meaning those workers figure they have a good chance of taking the money and finding another job.
“The hotter the labor market is, the more likely people are to say, ‘Sure, I’ll take this, thank you very much,'” says Peter Cappelli, director of Wharton’s School of Human Resources at the University of Pennsylvania. “You wouldn’t have had many people taking it in 2009.”
… The announcement comes at a time when people are quitting their jobs in record numbers. As a percentage of total employment, the October quits rate released on Monday was slightly down from the previous month, but otherwise as high as it’s been since the Labor Department started collecting data in 2001.
As more organizations look to cut overhead costs and increase profit margins, there might soon be more news of layoffs. Communicators can take a note from the way Verizon handled its communications to employees: The announcement received better headlines than General Motor’s recent staffing-reduction news.
Verizon’s culling of its labor force comes shortly after General Motors said it would lay off tens of thousands of workers in a shift to making more SUVs and fewer sedans.
Some observers say the job cuts at GM, Verizon and other big companies is an early warning of a possible economic slowdown ahead, with one tally predicting U.S. companies will cut nearly 495,000 jobs this year.
However, investors didn’t seem as happy over the announcement. Verizon company shares fell more than 1 percent on Monday.