Verizon cuts 3,000 jobs, sells 274 stores
What's the story
Verizon, a leading US telecom giant, is going through a massive restructuring of its retail business. The company has announced plans to sell 274 company-owned stores and cut around 500 corporate jobs. The move is likely to impact nearly 3,000 employees across its retail and head office operations. The store divestment will take effect on August 16. After the deal closes, Verizon will still own about 1,000 retail outlets.
Operational changes
Past store transfers saw retail employees stay within the business
Along with company-owned stores, thousands of other locations will continue to be run by franchise operators who already play a key role in the company's nationwide footprint.
Verizon has said that past store transfers have mostly seen retail employees stay within the business ecosystem.
In previous divestments, around 70% of employees at affected locations moved to franchise operators taking over those stores.
Past actions
Verizon's biggest-ever workforce reduction
In November, Verizon had transferred 179 company-owned outlets to franchise operators and permanently closed another retail location.
The same month, the company announced its biggest-ever workforce reduction, saying over 13,000 jobs would be cut. Hundreds more were eliminated in May as part of the ongoing program.
The changes come under Dan Schulman's leadership who became Verizon's CEO in October after serving on its board since 2018.
Market strategy
Slower subscriber growth and fierce competition
The restructuring comes as the US wireless industry grapples with slower subscriber growth and fierce competition from AT&T and T-Mobile.
To keep customers, telecom giants have upped their spending on network expansion while introducing attractive smartphone subsidies, discounted service plans, and loyalty incentives.
Last month, Verizon simplified its wireless plans, waived activation and upgrade fees, and launched a loyalty program with discounts and customer rewards.