Embarq Embarks on Worker Cuts
If Embarq lays off the higher end of that range, it will affect about 8 percent of a division that presently employs about 8,700. Embarq, which has close to 18,000 employees in all, also expects to reduce its contractor base by about 300 people.
Targeting "exempt" (or non-union) employees initially, Embarq is already seeking "volunteers to separate from the company," Embarq spokesman Charles Fleckenstein says. The company will extend the same voluntary deal to unionized employees "in the coming weeks."
If it can't find enough volunteers, Embarq will head into non-voluntary mode. Regardless, the company plans to complete the process by year-end. Non-union employees can expect to get two weeks of pay for every year they've been with the company. Severance packages for unionized workers will vary by market.
“To ensure the continued success of our enterprise, we are constantly evaluating the size and placement of our work force, including the way we staff and prioritize work,” Fleckenstein says. "This action helps rationalize the size of our work force relative to the size of our customer base.”
Embarq has not yet determined how much it will save from the cuts.
Embarq, like larger telcos, has suffered from subscriber voice line losses as customers churn to local cable operators or chuck their landline altogether and go wireless-only. (See Gorillas Endangered.) Embarq, unlike many of the bigger dogs, doesn’t have wireless in its service arsenal, but has remained hopeful that it can achieve some growth with wireless backhaul services. But cable rivals such as Cox Communications Inc. are already starting to make hay with backhaul strategies of their own.
Embarq ended the second quarter with 6.02 million access lines, down 170,000 lines from the year-ago quarter. The year-over-year rate of access line loss rose 7.8 percent in the second quarter. Embarq made up some ground with high-speed Internet (24,000 sub adds, giving it 1.36 million) and video services (24,000 sub adds, extending the total to 239,000), but that wasn't enough to make up for access line losses.
On the financial front, Embarq's second quarter revenues dipped by $56 million, but net income rose 17 percent, to $206 million, thanks in large part to $84 million in cost cuts. (See Embarq Cuts Its Way to Growth.
— Jeff Baumgartner, Site Editor, Cable Digital News