Verizon to Slash Jobs to Reduce Costs

Verizon Communications Inc. will eliminate the equivalent of 10,000 jobs this year to lower costs as sales growth slows.

The reductions add to the equivalent of 29,000 jobs cut last year, Co-Chief Executive Ivan Seidenberg said Monday at an investor conference in Orlando, Fla. Verizon ended 2001 with 247,000 employees, down 16,000 from the previous year. That doesn’t include “equivalent” head count, which the company said includes overtime and contractors.

Seidenberg, who didn’t say how many workers will be fired, is paring expenses after local-phone lines declined for a third straight period and consumers relied more on mobile phones in the latest quarter. Sales at the biggest local phone company rose less than 1% in the fourth period, down from 2.8% in the third.

Verizon and other large regional phone companies “are not in great shape because of the softer economy,” said Lowell Miller of Miller/Howard Investments Inc., which manages $300 million and owns 170,000 Verizon shares.

Rivals including SBC Communications Inc., the second-biggest U.S. local-phone company by sales, and Qwest Communications International Inc. have cut jobs and capital spending in the last year to cope with the U.S. recession and demand that didn’t live up to expectations. Smaller local-phone companies, such as McLeod USA Inc., have sought bankruptcy protection.

New York-based Verizon has “a wonderful opportunity to get leaner without having to worry about a lot of competition,” Miller said.

The company, formed in 2000 by the combination of Bell Atlantic Corp. and GTE Corp., plans capital spending of $15billion to $16billion this year, compared with $17.4billion in 2001.

Bob Varettoni, a Verizon spokesman, said 2% to 3% of the work force, on average, has left the company voluntarily each year.

Seidenberg, at the Credit Suisse First Boston investor conference, also reiterated 2002 forecasts, which include profit of $3.20 to $3.30 a share and a sales increase of 3% to 5%. Sales were $67.2 billion last year.

Verizon has 8 million long-distance customers and is on track to reach a goal of 10 million by the end of the year, Seidenberg said. The company is trying to win U.S. approval to sell the service in more states to make up for slowing local-phone sales.

Shares of Verizon fell 66 cents to $47.93 on the New York Stock Exchange. They have risen less than 1% this year.