Verizon employee leaks news about more layoffs coming this week
A Verizon employee leaks news about upcoming layoffs expected to be announced this week.
Verizon expected to announce more layoffs this week | Image by PhoneArena
Verizon laid off a whopping 13,000 employees (a company record) this past November, just six weeks after Dan Schulman took over as Verizon's CEO. More layoffs took place in May, and now the carrier is believed to be sharpening its axe once again in a bid to reduce its headcount.
Verizon is expected to announce more layoffs this Thursday
A report in the Dow Jones publication "Barron's" mentions that back in January, Schulman said during an earnings call that he wants to save $5 billion in operating costs this year. The executive made it clear that much of these savings would come from headcount reductions.
More layoffs are expected to be announced Thursday morning, according to an employee who claims to have been briefed on this coming announcement. The number of employees affected is unknown.
The CEO made Verizon employees fully aware of his plans during an internal webcast on December 5. During that communication, Schulman said, "If we don’t have enough money to put back into our value proposition to customers, we are going to continue to shrink." As it is, the carrier plans to spend $16 billion to $16.5 billion this year on capital expenditures, a smaller amount than previous years.
Verizon has lost market share over the last five years
He also admitted that Verizon had lost market share over the last five years, something that seemed obvious to those who watch the US wireless market. Even worse, Verizon's customers have not given the carrier good satisfaction scores, with Schulman saying that these numbers have not been great.
Which "Big 3" carrier has the most problems?
Verizon will release its second-quarter results on July 24. As usual, the number everyone will be looking at is net new postpaid phone additions. During the first quarter, Verizon reported 55,000 new additions for this metric, with Wall Street looking for 250,000 to 300,000 additions to this category for Q2. For the full year, Verizon expects to add 750,000 to 1 million net new postpaid phone subscribers.
Some of the Verizon perks offered by the carrier. | Image by Verizon
Most analysts still consider net new postpaid phone additions to be the gold standard metric because such customers are the most stable and spend the most money for service. T-Mobile stopped reporting this figure starting this year and has started promoting net postpaid account additions as its primary metric for customer growth. T-Mobile did this because 90% of its postpaid phone lines are on multi-line accounts.
T-Mobile also wants investors to focus on account growth and average revenue per account (ARPA). Wall Street was not happy with T-Mobile's decision because net new postpaid phone additions have been the industry standard for years. The change also makes it tougher for analysts to compare T-Mobile's quarterly numbers with those released by Verizon and AT&T.
For investors, Verizon is a total return play
Verizon's shares declined 21 cents, or 0.49% on Tuesday to close at $42.47. For the year, the shares are up $1.95 or 4.81%. Stock appreciation isn't the whole story with Verizon. You also have to look at the total return, which includes a healthy 70.75-cent dividend per share that will be paid next on August 3 to those who owned the stock by July 10.
Should Verizon keep the dividend the same over the next four quarters, the yield at the current stock price of $42.47 works out to 6.66%. It is not a bad income to receive while owning the stock.
We should point out that Verizon added the new Simplicity Plan to move customers away from complex multi-tiered plans. The plan is priced at $45 per month, $30 with promotional discounts. All subscribers get unlimited access to the carrier's 5G Ultra Wideband network. The plan includes 10GB of mobile hotspot, international roaming, and satellite texting.
Verizon One is a bundle plan that combines mobile and home internet (via Verizon's fiber network) for $70 per month.
Verizon customers are invited to opt into the Verizon Loyalty program, which does away with those pesky activation and upgrade fees. Subscribers also earn 3% cash back on their monthly mobile and 5G home internet bill in Verizon Dollars. These can be redeemed for new phones, tablets, accessories, or even gift cards.
In the My Verizon app, there will be time-sensitive offers available on a first-come, first-served basis.
Should you be impressed by Verizon's rewards program?
Frankly, as a Verizon customer who has over 20 years of experience paying the carrier monthly, I think the Simplicity package is a good idea. But the rewards program still pales compared to T-Mobile Tuesdays. In addition, T-Mobile offers you free Netflix, free MLB.com, and a host of other freebies. Verizon still wants you to pay for its so-called streaming deals.
Sure, you can probably save some nice money paying $23 per month for the Disney/ESPN/Hulu bundle with Netflix and HBO Max. Actually, Verizon subscribers would be saving over 42% by taking advantage of this deal.
But what Schulman does not understand, having been locked up in his swanky CEO office, is that Verizon customers, trying to deal with higher health insurance costs and a crummy economy, do not want to pay one extra cent for so-called perks. As noted, there is a carrier that does offer plenty of free perks and it doesn't begin with a "V."
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