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Verizon Plans to Cut almost 7% of Its Workforce

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Dec. 4 2020, Updated 10:52 a.m. ET

Reducing workforce to cut costs

Last week, Verizon (VZ) reported that 10,400 employees, or ~6.8% of the company’s total workforce, had agreed to leave the company as part of its buyout program. In September, it had offered up to 44,000 of its management employees the opportunity to take early retirement as part of its cost-reduction initiative.

The telecommunications company is planning to cut $10 billion in total costs by the end of 2021. Verizon is looking to preserve its resources so it can invest in key areas such as 5G network development.

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Verizon reported an adjusted EBITDA of $12.2 billion in the third quarter, up from $11.4 billion in the same quarter of the previous year, as it concentrated on driving profitability via cost and capital efficiencies across its operations. The company’s adjusted EBITDA margin expanded to 37.4% in the third quarter from 36% in the previous year’s quarter supported by higher wireless margins.

Peer comparison

In comparison, AT&T’s (T) combined domestic wireless operation’s EBITDA margin was 42.8% in the quarter that ended on September 30. Sprint (S) and T-Mobile (TMUS) reported consolidated adjusted EBITDA margins of 56.5% and 40%, respectively, in the same period.

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