Slashdot Mirror
Verizon Announces 10,400 Employees Will Voluntarily Leave the Company (techcrunch.com)
Verizon today announced that 10,400 employees -- about 7 percent of its worldwide workforce -- are taking buyouts to leave the company. "This is part of an effort to trim the telecom giant's workforce ahead of its push toward 5G," reports TechCrunch. From the report: 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. "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," CEO Hans Vestberg said in a note to employees, CNBC reports.
#MAGA
What does a reduction in force have to do with the deployment of 5G?
The people taking the buyout are either people close to retirement who have lots of experience, or they're people who are good enough that they are confident they'll easily find another job. The net result is that while they're losing 7% of their workforce, they're likely losing 20% of their experience and 20% of their productivity.
Of course they are leaving voluntarily. Because if they don't meet their number of 10400 people voluntarily, it will change to involuntarily. This is a common big company buyout of employees. The company will emphasise the first offer will be the best and if they don't hit there number there will be another offer but not nearly as good. So as an employee you have to ask yourself if you're in danger or not, and is it worth the money or not.
Either way, Verizon will make their number, and if they get a few extra then bonuses to execs all around!
I wonder who Verizon's latest crop of management consultants is. I've been seeing a ton of stories along these lines, almost exclusively at old-line companies. I think the execs are being told, "Listen, if we fire all the experienced people and replace them with college grads, our digital transformation will accelerate to unheard-of levels, AND you'll save a ton of money on salary!"
I'm well aware that large companies collect a lot of dead wood (or at least wood that isn't super-productive anymore.) But, as I've said I've seen this over and over again during the run-up of what I'll coin Dotcom Bubble 2.0. IBM is firing anyone in the US and Europe who isn't deemed hip enough to jump on the cloud/mobile/social/AIMLBlockchain/cognitive train. I saw a few months ago that AT&T is doing the same thing. HP/HPE/DXC dumped something like 60,000 people over the last couple of years during their spin-merge. It's almost like they're daring any attorney who might bring an age discrimination lawsuit to just try it and see how they're crushed. Even Microsoft, who was famous for never having to lay people off started doing so in the last few years...and they're not exactly hurting for money.
One thing I wonder is how many people being fired are from the "old school" days when a job with the phone company amounted to permanent employment. I'm assuming that's why they're giving them up to 60 months' salary and benefits...to discourage wrongful termination suits. All I know is this...I'm 43 and work very hard to stay current...and I'm sure that won't save me when the company I'm working for decides to fire me when I'm 55 and still years away from being able to access my retirement money.
GregMmm's post hit it squarely on the head.
Folks ,who can, are leaving voluntarily because if they don't, they're candidates to be let go during the next round of layoffs.
We see the same song and dance about twice a year. First and last quarters usually.
They are actively canvassing folks twice a year to see who is interested in leaving. Anyone who doesn't take the hint is tossed
into the magic sorting machine to find out who get's the short straw on the next draw.
Lots of " re-organizations " moving folks around which dissolves some groups, but inflates others ( by combining groups ) which
gives HR all they need to cut folks loose. ( They have too many employees doing job X )
Hell, they even started dangling the lump sum carrot in front of management.
Previously, management had to take the annuity and did not have the lump sum option. Now, in an effort to cut as many folks
as they can, the lump sum option is now a reality.
Many folks are waiting around for some magical " package " like the days of old where folks got a few years of service tacked on,
a pension bump and a decent amount of exit cash. ( Which is why we have so many folks with 30, 40 and even 50+ years of service
still working ) They haven't figured out that if the company were to offer it again, so many would take it, the company would have to turn
around and go on a hiring spree. Thus, no package.
My best guess as to why is due to the stupid amounts of debt the company took on with its latest assimilation . . . .er. . . acquisition.
What the company doesn't realize is this: All the folks they want to push out the door are the ones with all the expertise. :|
By the time they get done with layoffs, they'll just end up having to hire them back as contractors to keep things running
We're already starting to see hints of this.
"Contact the database administrator for access" :|
"We can't, they retired."
"What about the alt-administrator ?"
"They retired too. . . "
"Is there anyone maintaining that database at all ?"
"Nope, they all retired."
They offered employees up to 60 weeks of pay (more than a year) to *not* work for a shitty company and go get a different job instead, perhaps after taking a 9-month paid vacation. That sounds pretty great to me!
I wish my company would give me a bonus equal to a year of pay to get me to leave and go work for Raytheon or somebody else. I'd darn sure take that!
I'd probably take a 2-month break to vacation and do some things around the house, then get a job and chunk 10 months pay into savings. That savings would be my "fuck you money". If the boss turns out to be an ass at the new job, I can comfortably say "fuck you" and take another two-month vacation before looking for where I want to work next.
Verizon has ~$1 billion of bonds due next year and more coming due the next few years.
Verizon is very unlikely to refinance the debt at anywhere the coupon payment / interest rate the existing bonds have.
They're BBB rated and one cut above junk status and, being unable to refinance the bonds for near investment grade rates will push them into junk status and make all of their future borrowing costs higher.
Most of large corporate America is in the same situation with large debt issuances over the last few years a quite low rates used to buy back stock.
Now, many of the same companies are on the verge of not being able to refinance debt at anywhere near investment grade rates.
Rates for risk free US treasury are 3% for 5 years and more for 10 years. Corporation with less than stellar balance sheets - *cough* lots of the mega corporations - are facing a large pressure to clean up balance sheets by cutting costs and avoiding the 1 downgrade to junk status. Hence the near inverted yield curve.
Company makes big moves
Check the balance sheet
Check if the debt is trading well above the company's S&P debt rating (Finra market data has this)
Check if the company has a large amount of debt maturing in the next year or three