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Verizon to slash 8,000 jobs

28 июля 2009

Verizon, the second-largest US telecoms group, is to cut a ­further 8,000 jobs in response to the recession and the loss of fixed-line business.

The cuts, equivalent to 3.4 per cent of Verizon’s workforce, come on top of a similar sized reduction in headcount over the past 12 months and showed, said Craig Moffett of Bernstein Research, that “no company is immune to the severity of the current downturn”.

Discussing Verizon’s second-quarter results, which included a 7.2 per cent fall in net income to $3.2bn, Ronald Lataille, chief financial officer, said: “Clearly the broader economic issues are affecting the business.

“Although we are taking steps to mitigate the negative impacts of the economy in the short term, we also need to more ­significantly reduce the wireline cost structure over the next 12 to 18 months.”

Operating revenues in Verizon’s global enterprise business segment, which mainly serves big companies, fell 6.7 per cent to $3.7bn as customers reacted to the downturn. Wholesale revenues fell 7.5 per cent to $2.4bn.

Revenues in Verizon’s fixed-line business fell 5.2 per cent to $11.5bn in spite of growth in fibre optic-based video services and broadband services. The number of fixed lines served by Verizon fell by a further 630,000, or 12.3 per cent, to 19.7m, mostly reflecting wireless substitution.

Verizon reported a 7.2 per cent decline in net income to $3.2bn, or 52 cents a share, from $3.4bn, or 66 cents a share, a year earlier, with the decline partly reflecting merger integration and pension charges.

Operating revenues rose 11.3 per cent to $26.9bn, partly reflecting the acquisition of ­Alltel, the rural mobile phone network operator, in January 2009. Pro forma, operating revenues grew 1.9 per cent.

The results were in line with expectations but the group’s shares fell in spite of upbeat comments from Ivan Seidenberg, the chief executive.

“Our operational and financial discipline produced continued revenue and earnings growth, as well as an expansion of our already strong operating cash flows,” he said. Verizon Wireless, the largest US mobile operator, signed up 1.3m new subscribers in the ­second ­quarter, bringing its total to 86.8m at the end of the quarter. The unit, jointly owned by Verizon Communications and the UK’s Vodafone, reported revenues of $15.1bn, up almost 30 per cent on a year earlier.

The wireless performance reflected the Alltel acquisition, subscriber growth and mobile data revenues, which grew 33.2 per cent. The company said 60 per cent of data revenues were now coming from non-messaging services and noted that 40 per cent of the handsets sold in the latest quarter were smartphones.

Источник: Financial Times

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