If you’ve been following tech and telecom news, you’ve probably seen headlines about massive job cuts at Verizon. The story broke on Thursday, November 13, when Reuters first reported that the wireless giant is planning its largest-ever round of layoffs.
This news is getting attention because it shows how even major telecom companies are struggling to compete in today’s market. It’s also one of new CEO Dan Schulman’s first major moves since taking over in October.
What Happened
According to Reuters, Verizon is planning to cut about 15,000 jobs in what would be the company’s biggest layoff ever. The cuts will affect about 15% of Verizon’s total workforce and could happen as soon as next week.
Here’s what the layoffs will look like:
- Non-union management positions will be reduced by more than 20%
- Around 180 corporate-owned retail stores will become franchised operations
- The company had about 100,000 U.S. employees at the end of 2024
CEO Dan Schulman, who joined from PayPal in early October, said last month that Verizon needs “cost transformation, fundamentally restructuring our expense base”. He wants to make the company “simpler, leaner and scrappier.”
Why This Is Happening
Verizon is facing serious competition problems. In the third quarter, the company only added 44,000 monthly bill-paying wireless subscribers, while T-Mobile led with more than 1 million net subscriber additions.
The wireless market is changing fast:
- Rivals AT&T and T-Mobile have ramped up promotions with aggressive discounts and trade-in deals
- Cable companies like Comcast and Charter are entering the wireless market by bundling mobile plans with internet
- There’s a shrinking pool of new customers as competition heats up
Schulman has been on Verizon’s board for seven years and says the company has relied too heavily on price increases instead of growing its customer base. He stated, “Our financial growth has relied too heavily on price increases, a strategic approach that relies too much on price without subscriber growth is not a sustainable strategy”.
The Market’s Response
Verizon’s stock rose about 1.5% when the layoff news broke. Investors seem to like the cost-cutting approach, even though the company’s shares have only gained 8% over the last three years compared to the S&P 500’s nearly 70% rise.
But not everyone thinks the cuts will solve Verizon’s problems. Craig Moffett, a senior analyst at MoffettNathanson, pointed out that the CEO’s first priority is stopping customer losses, which requires subsidizing expensive phones. He questioned whether these cost reductions will actually offset the higher costs of keeping customers.
What This Means for Verizon’s Future
Verizon has been cutting jobs for years. The company cut almost 20,000 employees over three years leading up to 2024, including 4,800 through a voluntary program last year and 10,400 in 2018.
The company has also made some big financial moves:
- Spent $52 billion on wireless spectrum in a 2021 auction for its 5G network
- Made a $20 billion deal to acquire Frontier Communications last year
- Spent $6 billion to buy prepaid provider TracFone Wireless
Now Schulman is betting that becoming “leaner and scrappier” will help the company compete better without raising prices even more.
What People Are Saying
The reaction to this news has been mixed. Some people understand that companies need to restructure to stay competitive. Others worry about what this means for the telecom industry as a whole.
For the 15,000 employees affected, this news is devastating—especially right before the holidays. Many are likely wondering if their years of service and expertise matter when companies face pressure from Wall Street.
Industry watchers are asking whether cutting jobs is really the answer when your main problem is losing customers. You can’t improve customer service by having fewer people to serve customers.
The Bottom Line
Verizon’s massive layoffs show how tough the wireless market has become. With more competitors offering cheaper plans and better deals, even the biggest players are struggling to grow.
The question now is whether Schulman’s strategy will work. Can Verizon cut enough costs to stay profitable while also investing in the customer experience needed to compete with T-Mobile and AT&T?
What do you think? Are these layoffs a smart business move or a sign of deeper problems at Verizon? If you’re a Verizon customer, have you thought about switching to a competitor? Share your thoughts in the comments below.
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