GTE Consolidation Threatens Some Jobs in Thousand Oaks
Ever since March, many of the employees at GTE California headquarters in Thousand Oaks have been working in jobs that may not exist next year.
Last spring GTE Corp., the Stamford, Conn.-based telecommunications giant, announced it would consolidate its seven phone companies, which serve 31 states, into four regional offices and a central headquarters. As a result, GTE has said some employees will be laid off, given early retirement or incentive packages, or transferred during the consolidation, which is being done to cut costs.
New Headquarters
Two weeks ago, Thousand Oaks was chosen to become the headquarters for GTE West. As of early 1989, the operations of three of GTE’s local phone service companies, GTE Hawaiian Tel, GTE California and GTE Northwest in Everett, Wash., will be consolidated into the Thousand Oaks operation.
At the moment, there are 33,000 employees within the GTE West area, and those actually serving the customer--installers, repairmen and operators, for example--will mostly be unaffected by the consolidation, GTE executives say.
Still unclear, however, is how many of the 2,450 administrative and engineering jobs in Thousand Oaks will be kept in place.
“There is no question there is going to be a reduction in staff,” said Tom Leweck, a GTE California spokesman. “There are going to be some significant changes here.”
Separate Entities
Until now, GTE’s seven phone companies operated as separate entities that set their own agendas and had their own independent management groups.
Now GTE will centralize policy-making decisions by choosing one central office, which financial analysts expect to be in the Dallas area. And instead of having, say, seven marketing departments, there will be just one department making policy. The new regional offices will implement the policies made in the general office.
The bottom line is that the number of executive jobs will be reduced, analysts say. Leweck said that some marketing, finance and personnel jobs from Thousand Oaks will be transferred to the centralized office.
As part of the overhaul, Charles Crain has been chosen president of GTE West. Crain is president of GTE Hawaiian Tel. He is one of nine members of the GTE committee mapping out the consolidation.
Year of Changes
GTE is expected to have its plan in place by October. The transfers, retirements and layoffs will come over the next year, Leweck said.
Crain is scheduled to arrive in Thousand Oaks around October, after the consolidation has been decided. “Charlie isn’t coming out here with pruning shears,” Leweck said.
But Robert Morris, an analyst with Goldman Sachs, said of Crain: “I think he will continue to push for a reduction in head count and increases in efficiency. Another push will be for new avenues of revenue growth.”
A 33-year veteran of GTE, Crain, 56, has a reputation among executives and employees of being fair but tight-fisted. Before going to Hawaii in 1985, Crain put in six years as chief operating officer of California GTE.
“He watches the expense levels very, very carefully,” said E. Robert Wellman, who succeeded Crain in Thousand Oaks.
Much Work
Crain will have plenty of work to do. GTE’s expenses, for instance, are much higher than its major competitor, Pacific Bell. GTE California charges residential customers a flat service rate of $9.75 a month; Pac Bell charges $8.25.
Although GTE California made a profit of $362 million on sales of $2.9 billion last year, it faces a financial problem. The field staff for the state’s Public Utilities Commission thinks GTE California is charging too much and has recommended a $530-million rate reduction. Analyst Morris also points out that Pacific Bell has 198 phone lines per employee, compared to GTE’s 146 lines per employee. “What that means is that if GTE were on the same level of productivity as Pacific Bell, they could get by with anywhere between 20% to 30% less people.” GTE thinks this comparison is not apt because Pac Bell contracts out some work while GTE does it in house.
Crain has a history of increasing productivity. While in Hawaii, he decided employees who were repairing GTE’s fleet of repair trucks could fix those of other companies as well. Crain set up a subsidiary and put his employees to work. “He is bottom-line oriented,” Leweck said.
