Verizon aiming to trim spending by $10 billion
Verizon (VZ) rolled out a program that seeks to encourage thousands of its employees to take early retirement. This early retirement is part of the company’s initiative to trim its workforce and cut costs.
A year ago, Verizon disclosed a plan to cut $10.0 billion in expenses by around 2021. Verizon’s early retirement program is voluntary and mostly targets management employees, while frontline salespeople are excluded from the program.
Program mostly targets management
Verizon’s (VZ) employees that are included in this program have until mid-October to accept Verizon’s early retirement package. This package includes three weeks of pay for each year of employment with the company.
Verizon finished the first half of the year with 153,100 workers. The company employs almost three times as many workers as T-Mobile (TMUS), which closed the first half with about 51,000 employees. Sprint (S) and AT&T (T) exited the second quarter with 30,000 and 273,210 employees, respectively.
Verizon’s workforce has been shrinking in recent years, as illustrated in the chart above. This downtrend is due in part to the company selling some of its landline operations.
Investing in 5G initiatives
Verizon recently began selling 5G services in four US cities. The company may be looking to save costs, which could enable it to continue investing in 5G developments to expand its revenue opportunities.
Ericsson (ERIC), a leading vendor of telecom equipment and a prominent Verizon supplier, predicts that there could be as many as 1.0 billion 5G subscribers globally by 2023. Verizon’s CEO, Hans Vestberg, joined the company in August. He previously served as Ericsson’s CEO.