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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
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 have not heard yet that T-Mobile or AT&T need to generate the money required for 5G deployment by reducing payroll expenses. So, where will the other wireless telecoms get the cash?
In a time of universal deceit, telling the truth is a revolutionary act. George Orwell
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.
How much can it cost to have the marketing team slap "5" stickers over the 4 in the marketing materials?
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