Verizon announced Thursday, July 16, that it will eliminate approximately 3,000 jobs while transferring hundreds of its company-owned retail stores to franchise operators as part of a sweeping restructuring designed to reduce costs and reshape its retail business.
The company said it will sell 274 corporate-owned retail locations, leaving Verizon with approximately 1,000 company-operated stores after the transition takes effect on August 16. The restructuring will affect roughly 3,000 employees, including approximately 2,500 retail workers and 500 corporate employees.
The stores themselves are not closing.
Instead, Verizon will transfer ownership to authorized franchise operators, who are expected to continue operating the locations under the Verizon brand. The company said many retail employees may receive offers to remain at their existing stores under the new ownership structure, similar to previous store divestitures.
The move marks another major step in Verizon’s effort to simplify operations under Chief Executive Officer Dan Schulman, who has launched an aggressive turnaround strategy focused on reducing expenses while investing more heavily in customer experience, network upgrades and digital services.
Verizon has faced intense competition in the U.S. wireless market as rivals continue competing aggressively for new subscribers through promotional pricing, bundled services and expanded fiber offerings.
Company executives believe operating fewer corporate-owned stores while relying more heavily on authorized retailers will lower operating costs without significantly reducing customer access to in-person sales and service.
The restructuring follows additional workforce reductions announced earlier this year and a much larger round of layoffs completed late last year as Verizon accelerated efforts to improve profitability and streamline operations.
The company has also simplified wireless plans, introduced new loyalty programs and expanded artificial intelligence across portions of its customer service operations in an effort to improve efficiency while reducing long-term operating expenses.
Industry analysts say the strategy reflects changing consumer behavior, with more customers purchasing smartphones, activating wireless service and resolving account issues online rather than visiting physical retail stores.
For customers, Verizon says the transition should result in little disruption. The divested stores will continue operating as authorized Verizon retailers, selling devices, activating service and providing customer support.
For employees, however, the announcement represents another significant workforce reduction as one of America’s largest telecommunications companies continues reshaping its business model amid slower subscriber growth and increasing competitive pressure.
Verizon is scheduled to report its second-quarter financial results later this month, when investors are expected to receive additional details regarding the restructuring and its expected financial impact.
JBizNews Desk | New York
© JBizNews.com All Rights Reserved. Reproduction or distribution without written permission is prohibited.
