Verizon Communications is preparing to eliminate roughly 15,000 jobs, which will become the largest round of layoffs in its history, as part of a sweeping cost-cutting effort aimed at improving efficiency and addressing slowing growth in its wireless and home internet businesses, according to a WSJ report.
The cuts, which represent about 15% of the company’s workforce, are expected to take place as soon as next week.
Most reductions will be made through layoffs, with additional changes coming from a transition of hundreds of corporate-owned stores into franchised operations.
Schulman’s cost transformation plan
The restructuring follows the appointment of Daniel Schulman, former PayPal and Virgin Mobile USA CEO, as Verizon’s new chief executive last month.
Schulman, who had served as Verizon’s lead independent director for seven years, has said he plans to pursue an aggressive transformation of the company’s cost structure while maintaining customer focus and avoiding price hikes.
“We will be a simpler, leaner, and scrappier business,” Schulman said last month, emphasizing that cost reductions would be a “way of life” for Verizon going forward.
He added that Verizon’s financial growth has relied too heavily on price increases, a strategy he called unsustainable without stronger subscriber growth.
The layoffs are expected to target primarily non-union management positions, with one source indicating that more than 20% of that workforce could be affected.
In addition, Verizon plans to transition about 180 corporate-owned retail stores to franchised operations, further reducing its payroll.
The company employed about 100,000 people in the United States as of early 2024, according to regulatory filings, after cutting nearly 20,000 roles over the previous three years.
Verizon’s last major voluntary exit program, announced in 2018, resulted in 10,400 employees leaving the company.
Competition and subscriber pressures mount
Verizon’s move comes amid intensifying competition in the US telecommunications market, where rivals AT&T and T-Mobile have been adding subscribers while Verizon struggles to retain its customer base.
The carrier has lost postpaid phone subscribers for three consecutive quarters, including a net loss of 7,000 in the most recent period, missing Wall Street expectations for growth.
In response, Verizon has rolled out a price-lock guarantee for certain wireless plans, but competitors have introduced similar offers.
Analysts have noted that Verizon’s premium pricing strategy — among the highest in the sector — has become increasingly difficult to sustain as consumer spending softens and rivals gain market share.
Craig Moffett, a senior analyst at MoffettNathanson, said Schulman’s first challenge will be to stem subscriber churn, likely requiring higher spending on handset subsidies to retain customers.
“The obvious question was how Verizon planned to pay for that. Now we know,” Moffett said, adding that it remains unclear whether the cost reductions will offset the increased retention costs.
Shares edge higher as Verizon streamlines
Verizon’s shares rose about 1.4% on Thursday following reports of the layoffs.
Despite the modest uptick, the stock has largely stagnated over the past three years, rising just 8% compared with the S&P 500’s nearly 70% gain over the same period.
The job cuts mark the most significant move yet by Schulman as he seeks to reposition Verizon for a more competitive future.
The company has previously said it intends to exit or streamline non-core businesses and focus resources on areas with clearer paths to profitability.
Verizon’s cost challenges come after years of major investments, including $52 billion for wireless C-Band spectrum, a $20 billion deal to acquire Frontier Communications, and a $6 billion purchase of prepaid carrier TracFone Wireless.
As Schulman begins his tenure, Verizon faces the dual challenge of cutting costs while reigniting growth, a balance that will test the company’s ability to adapt in an increasingly crowded telecom landscape.
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