US wireless giant Verizon announced on Thursday that it will lay off more than 13,000 employees, marking the largest single workforce reduction in the company’s history. The move comes as Verizon seeks to lower costs and simplify operations. In addition to the job cuts, the company plans to convert 179 corporate-owned retail stores into franchised locations and close one store.
Verizon expects to record a severance charge of $1.6 billion to $1.8 billion in the fourth quarter. The majority of affected employees, over 80%, are anticipated to leave next month. Following the announcement, Verizon shares fell by 1%. CEO Dan Schulman emphasized the need to streamline operations and reduce complexity to better serve customers.
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The company stated that the reductions are not linked to its use of AI, although Verizon is establishing a $20 million career transition fund to help laid-off employees acquire skills relevant to the evolving technology landscape. The layoffs mainly impact Verizon’s US workforce, which totals roughly 100,000 employees.
Verizon faces increasing competition in the wireless sector from rivals offering cheaper plans and cable operators entering the market. The company added just 44,000 monthly bill-paying wireless subscribers in the third quarter, trailing AT&T and T-Mobile, which added over 1 million net subscribers.
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Over the past three years, Verizon has cut nearly 20,000 jobs while investing heavily in 5G and acquisitions, including a $52 billion midband spectrum purchase and the $20 billion acquisition of Frontier Communications. Schulman, who became CEO in October, said the restructuring is part of Verizon’s strategy to regain leadership in the communications industry.