Shares of Verizon Communications Inc. (VZ) dropped Thursday after reports emerged that the telecom giant is preparing for its largest workforce reduction ever. According to The Wall Street Journal, Verizon will lay off 13,000 employees in the coming weeks as it attempts to cut costs and redirect resources toward improving its customer offerings.
The Layoff Details
The cuts will hit both Verizon employees and outsourced workers, according to an internal email from CEO Dan Schulman reviewed by the Journal. The company plans to begin notifying affected workers this week. To put that number in perspective, Verizon ended 2024 with roughly 99,600 employees, meaning this represents about 13% of its total workforce.
"Our current cost structure limits our ability to invest significantly in our customer value proposition," Schulman reportedly wrote to staff. "We must reorient our entire company around delivering for and delighting our customers."
In what appears to be an acknowledgment of where the industry is headed, Schulman also announced a $20 million career transition fund designed to train departing employees for roles in the age of artificial intelligence.
Why Now?
The layoffs come as Verizon grapples with painfully slow growth. Last quarter, total consumer revenue hit $26.1 billion, up just 2.9% year-over-year. Even more concerning, the company's business segment actually shrank 2.8% to $7.1 billion. Those aren't the kind of numbers that excite investors in a competitive telecom market.
VZ Price Action: Verizon shares were down 0.42% at $41.02 at the time of publication Thursday, according to market data.
