Two of the "Big 3" U.S. carriers continue to layoff employees with no end in sight
About a week and a half ago, we told you that Verizon plans to eliminate 4,800 jobs by next March. This will lead to a pre-tax write-off in the neighborhood of $1.9 billion that the carrier will take during the current third quarter. With the layoffs, Verizon will be bringing its headcount under 100,000 for the first time since the company was created on June 30, 2000, via the merger of GTE and Bell Atlantic.
Over at AT&T, the company is also handing out pink slips at a breathtaking pace. Together, approximately 475,000 people worked for both AT&T and Verizon in 2000. By this past June, that number had slipped 47.4% to 250,000 employees combined. Some of this employee loss was due to mergers and other changes to the two telecom firms. But we've seen an acceleration in the number of job cuts at both firms during more recent times.
Just before closing its acquisition of Time Warner, at the beginning of 2018, 252,000 people were getting paid by AT&T. That figure declined to 146,000 by the end of last June for a 42% decline. During the same time period, Verizon saw its headcount decline by one-third to 103,900 which is why the 4,800 being laid off will take the carrier under 100,000 employees.
Headcount figures for both AT&T and Verizon have been trending down. | Image credit-Lightreading
Why would these two companies, still involved in providing customers with cutting-edge wireless service, have to hand out pink slips? AT&T's top line has dropped by $83.1 billion between 2017 and 2023 but Verizon saw its revenue rise by $7.9 billion over the same period. By cutting jobs, both companies have managed to become more efficient. AT&T last year generated $813,500 of revenue per employee, up from $573,200 in 2017. Verizon took in $1,271,000 per employee in 2023 which was up from the $811,000 in gross per employee reported by Verizon in 2017.
All of these figures tell us what has happened to AT&T and Verizon employees, and why. But they don't tell the remaining employees about the future of their jobs, especially as more customers turn to ordering phones and wireless plans online. And there is also the fear AI will replace them whether their job requires them to handle customer queries or write software code to handle maintenance issues.
Shankar Arumugavelu, Verizon's chief information officer addressed this issue when he said, "Today, some of the key decisions that are being made by humans – are we comfortable letting that go and having the machine make that decision? I think that is the bridge we have to cross."
AT&T and Verizon continue to see how much they can whittle down their headcount without affecting the customer experience. For now, it appears that both firms are getting away with doing more with smaller payrolls. Until they hit the level of employment that leads to numerous complaints from subscribers, don't expect either firm to start hiring.
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