NEWS: Verizon offers buyouts to 74,000 workers
By Jeffry Bartash, CBS.MarketWatch.com
Last Update: 10:37 AM ET Oct. 1, 2003
WASHINGTON (CBS.MW) -- Verizon Communications has offered 74,000 managers a voluntary buyout package as the phone giant aims to further reduce costs.
The company expects "several thousand" employees to accept the offer, spokeswoman Sharon Cohen-Hagar said Wednesday.
The move comes just one week after Verizon (VZ: news, chart, profile) trimmed its profit forecast for 2003, citing stiff competition and weak demand.
To boost results, the company is trying to lower expenses. Last month, Verizon agreed to a contract with unionized workers that will lead to reduced health-care and other costs.
Yet costs of the new five-year contract, along with manager buyouts, will lead to a onetime reduction in earnings. Verizon has already said it plans to take a charge in the fourth quarter.
Under the buyout, managers who accept the offer would receive two weeks of pay for every year of service, up to a maximum of 35 weeks, according to Cohen-Hagar.
Managers would also be eligible for onetime lump sums of $15,000 to $30,000.
In addition, pension benefits would be increased by 5 percent and managers would be given full medical coverage for one year after their departure. They would not have to contribute to premiums during that time.
Once the labor contract is signed, Verizon also plans to offer buyouts to union workers, the company reiterated.
On Wednesday, shares of Verizon (VZ: news, chart, profile) rose 16 cents to $32.60.
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