Qwest Cuts More Jobs

Qwest Communications International Inc. (NYSE: Q) says it has reached an agreement with Communications Workers of America, a telecom union, to offer a voluntary separation program to certain employees in Qwest's local phone business. (See Carrier Scorecard: Economic Uncertainty.)

With access line loss increasing every year, Qwest and other big telcos are keen to rid themselves of union workers, since they generally cost more to keep on payroll.

The carrier had labor agreements with both the Communications Workers of America and the International Brotherhood of Electrical Workers. Its three-year labor agreements with the unions expire on August 16, 2008. Some 20,929 people, nearly 60 percent of its workers, were covered under these collective bargaining agreements.

Qwest says less than 2 percent of its overall workforce would be affected in the voluntary separations. As of September, Qwest employed about 37,026 people, so the carrier is predicting fewer than 740 people will take the separation packages.

Steady access line loss -- and no way to make up for it with new wireless customers -- is hurting Qwest. Qwest lost about 7 percent of its access lines in the last 12 months alone, due mostly to customers using wireless accounts to replace their primary home phone lines. Table 1: Qwest's Access Line Losses
Reporting Period Access Lines
Q4 2007 12,789,000
Q4 2006 13,795,000
Q4 2005 14,739,000
Source: Company data

Qwest says it wants a new wireless partner but has repeatedly maintained that it doesn't want to own a wireless network of its own. (See Qwest Not Satisfied With Sprint.)

— Phil Harvey, Editor, Light Reading

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