As we previously noted on October 5, 2018, New York, New York-based Verizon Communications has just offered 25% of its workforce, approximately 44,000 employees the opportunity to take a voluntary severance package in order to save $10 billion in costs by 2021. Verizon's severance package mostly targets senior employees, some with 20 years or more with the company, making it difficult for those in their 50s and 60s to obtain new employment.
It appears that the day of reckoning is here. According to an SEC 8-K filing dated December 11, 2018 …
** In September 2018, Verizon announced a voluntary separation program for select U.S.-based management employees. Approximately 10,400 eligible employees will separate from the Company under this program by the end of June 2019, with nearly half of these employees exiting in December of 2018. Principally as a result of this program but also as a result of other headcount reduction initiatives, the Company expects to record a severance charge in the range of $1.8 billion to $2.1 billion ($1.3 billion to $1.6 billion after-tax) in the fourth quarter of 2018.
** Verizon’s Media business, branded Oath, has experienced increased competitive and market pressures throughout 2018 that have resulted in lower than expected revenues and earnings. These pressures are expected to continue and have resulted in a loss of market positioning to our competitors in the digital advertising business.
Oath has also achieved lower than expected benefits from the integration of the Yahoo Inc. and AOL Inc. businesses. In connection with Verizon’s annual budget process in the fourth quarter, the new leadership at both Oath and Verizon completed a comprehensive five-year strategic planning review of Oath’s business prospects resulting in unfavorable adjustments to Oath’s financial projections.
** Verizon expects to complete an internal reorganization of legal entities associated with its wireless business in December 2018. Upon completion of this reorganization, Verizon expects to recognize a non-recurring deferred tax benefit of approximately $2.1 billion in the fourth quarter of 2018 which will reduce the Company's deferred tax liability by the same amount.
It is time for all non-critical Verizon employees, primarily those who perform non-specific support services to remain vigilant.
Just because something bad hasn't happened yet, doesn't mean it won't. It can happen to anyone, anytime, anywhere ... are you now wondering, Am I Next?