Verizon Offers Buyout To Its 74,000 Management Employees - InformationWeek

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Verizon Offers Buyout To Its 74,000 Management Employees

The offer is part of a bid by the carrier to slash costs after a contract with unionized workers didn't yield major cost savings it sought.

NEW YORK (AP) -- Verizon Communications has offered a voluntary severance package to all of its 74,000 non-union management employees, part of a bid to slash costs as rivals and rival technologies nibble away at the company's core telephone business.

The buyout package, offered to managers two weeks ago and confirmed on Tuesday, comes less than a month after Verizon averted a strike by its 78,000 union employees with a five-year contract that failed to produce many of the cost-saving provisions sought by the company.

Verizon had mentioned employee buyouts as a cost-cutting measure last week, when the company warned investors that it would not meet profit forecasts for the remainder of 2003.

Company spokeswoman Sharon Cohen-Hagar said Verizon expects "several thousand" managers to accept the package, which includes two weeks of pay for each year of employment up to 35 weeks, plus a bonus ranging from $15,000 to $30,000. A typical manager may earn $75,000 a year in salary, or about $1,400 per week.

A separate buyout offer will be made to at least 12,000 retirement-eligible union technicians and call-center operators upon ratification of their new contract, possibly next month. That accord brought concessions on employee health-care expenses which the company estimates will save $500 million, but the deal preserved long-standing protections against layoffs and nonconsensual transfers to different cities or regions--provisions which Verizon had been determined to eliminate.

In issuing last week's profit warning, Verizon said it expects to record a charge against fourth-quarter earnings to cover severance expenses for any employees who accept a buyout.

Like many traditional telephone companies, Verizon is beset by a litany of forces that are eating away at its core business of connecting voice calls to homes and businesses.

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