As Verizon slims down its workforce as part of a cost-cutting initiative, the operator said it expects to record a severance charge between $1.8 billion to $2.1 billion this quarter, a Tuesday SEC filing shows.
Yesterday Verizon announced about 10,400 managers had opted to take a voluntary buyout offer that the company had put on the table for 44,000 employees earlier this year. The headcount reductions are part of a cost-cutting program that aims to save $10 billion over four years so that Verizon can focus more investment on its 5G technology and deployment plans.
Verizon launched its commercial fixed wireless 5G in-home broadband service in four cities in October, and its 5G mobile service is expected to go live in early 2019.
Nearly half of the eligible staffers who accepted the buyout (which offers three weeks’ pay for each year with the company up to 60 weeks) will depart later this month, with remaining employees exiting by June 2019.
The departures trim Verizon’s global workforce by about 7 percent.
Most of the employees taking the buyout are U.S.-based management, excluding Verizon’s Oath unit and employees in some customer-facing roles, according to the Associated Press.
Verizon’s 8-K filing shows the company also expects to record a $4.6 billion goodwill impairment charge for its Oath media business, noting the unit has faced increased competition and market pressure throughout the year, resulting in lower than expected revenues and earnings. Verizon expects these pressures to continue and said Oath also had not benefitted as much as expected from integration of Yahoo and AOL.
