Verizon puts price tag on buyouts and says nearly 5,000 employees are leaving
By Claudia Assis
Communications giant also calls for other charges related to real estate
Verizon Communications Inc. said Thursday it expects charges of up to $1.9 billion in its third quarter in connection with employee buyouts.
About 4,800 employees will leave the telecommunications giant by March under the voluntary separation program that Verizon (VZ) announced in June. Half of those employees are leaving in September, the company said.
Verizon said that it expects to record severance charges in a range between $1.7 billion and $1.9 billion, or $1.3 billion and $1.4 billion in after-tax charges, in the third quarter.
In a filing in February, Verizon said it had about 105,400 full-time employees as of December, with 89% of them based in the U.S.
Verizon also said that as part of ongoing cost-savings initiatives, it plans to stop using certain offices and leave "non-strategic portions" of certain businesses, without giving more details.
As a result, it also expects to record asset and business rationalization charges in the range of $230 million to $380 million, or $170 million to $290 million after tax, in the quarter.
Analysts polled by FactSet expect Verizon to report in mid-October adjusted earnings of $1.18 a share on sales of $33.7 billion for its third quarter.
In the third quarter of 2023, the company reported adjusted earnings per share of $1.08 on sales of $33.3 billion.
Verizon earlier this month announced plans to buy Frontier Communications Parent Inc. (FYBR) in a $20 billion all-cash deal, a play for a fiber-internet provider in the U.S.
Verizon shares have gained more than 15% this year, slightly underperforming an advance of around 16% for the S&P 500 SPX.
-Claudia Assis
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09-12-24 1123ET
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