Verizon to Cut 15,000 Jobs as CEO Unveils Massive Restructuring, Plans to Franchise 180 Stores

According to a report published by Reuters, Verizon's new CEO plans to lay off roughly 15,000 employees in the greatest layoffs the U.S. telecom giant has ever experienced. This is part of the executive's initial attempts to reorganise the company in response to increased competition.

As cable operators enter the market and older competitors offer more affordable rates, the wireless carrier is facing increasing competition and worries about a declining pool of new customers. According to the report, the layoffs, which would impact roughly 15% of Verizon's personnel, may begin as early as next week and come after years of attempts to reduce expenses and employment. Verizon intends to convert roughly 180 corporately owned retail locations into franchised businesses and will decrease non-union management positions by more than 20%.

Verizon’s New CEO Dan Schulman and His Vision

Verizon CEO Dan Schulman was appointed in early October, having previously led PayPal, amid increased competition from rivals AT&T and T-Mobile, especially surrounding the release of new iPhone models, which feature aggressive discounts and trade-in offers aimed at retaining existing subscribers and attracting new customers.

According to Schulman last month, Verizon needs drastic reform, including cost transformation and a fundamental reorganisation of our cost base. "We will be a simpler, leaner and scrappier business." In the third quarter, Verizon trailed AT&T with only 44,000 new monthly bill-paying cellphone subscribers. With almost a million new net subscribers, T-Mobile took the lead. Comcast and Charter, two cable companies, are causing a stir in the wireless market by combining high-speed internet with mobile plans.

Having been on the Verizon board for seven years, Schulman has stated that he wants to be more customer-focused and does not want to raise costs. Verizon continues to charge the highest rates in the industry. A strategy that depends too much on price without increasing the number of subscribers is not sustainable, according to Schulman, who said last month that the company's financial success has been overly dependent on price hikes. After laying off about 20,000 workers over three years, Verizon had roughly 100,000 workers in the United States at the end of 2024.

Job Cuts New Normal at Verizon

Last year, Verizon declared a reduction of 4,800 employees via a voluntary program and incurred an approximate charge of $2 billion. Verizon announced in 2018 that 10,400 workers would depart as part of a previous voluntary separation program. "The new CEO's first commitment was to stop losing customers, which would require subsidising expensive handsets for a huge number of Verizon's subscribers," said Craig Moffett, senior analyst at Moffett Nathanson.

In order to expand its 5G network, Verizon paid $52 billion to purchase important wireless midband spectrum in a 2021 auction. It was questioned by several analysts if it paid too much. Last year, the business also agreed to pay $20 billion to acquire Frontier Communications. TracFone Wireless, a prepaid mobile phone service, was acquired for $6 billion.