Verizon severance deal
gets 21,600 takersThe Hawaii division isn't saying
how many of its 664 managers
accepted the package
Verizon Communications Inc., the largest U.S. local-telephone company, said 21,600 employees have accepted a severance package, allowing the company to cut staff by 9.8 percent as it battles to contain costs amid stalling growth.
Roughly one-third of Verizon Hawaii's 2,000 workers -- 664 managers -- were eligible for the package, though the company isn't saying how many took the offer.
Verizon, which had predicted more than 12,000 workers would take the early retirement offer, said its operating profit margin will improve in the fourth quarter from the third period partly because workers who accepted the buyout will leave this week.
The reductions bring to 48,600 the number of jobs Chief Executive Ivan Seidenberg has shed since 2001 in a bid to counter a decline in local-phone lines through expense reductions.
Verizon said last week it expects "significant" costs this quarter from the early retirement plan, which will leave the New York-based company with about 199,400 employees.
"A lot of these managers understand that the industry is ill structured. They see the writing on the wall," said John Krause, an analyst at Thrivent Financial for Lutherans, which owns 1.9 million Verizon shares.
"Verizon needs to cut costs."
Verizon said 16,000 managers and 5,600 union-represented employees participated in the early retirement program. Workers had until yesterday to accept the buyout package, President Lawrence Babbio said at a UBS conference in New York.
Managers who accepted the buyout receive two weeks pay for each year of service, up to a maximum of 35 weeks, plus a payout of as much as $30,000, depending on rank.
Pension benefits will rise 5 percent, and managers will continue to have company insurance benefits for one year.
No buyouts were offered in the fast-growing Verizon Wireless business, which is 55 percent owned by Verizon and 45 percent owned by Vodafone PLC of Britain.
