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Verizon is the latest tech company to announce cuts, expecting to lose 4,800 employees by March, with about half of those leaving in September.
As recently as February, Verizon reported it had 105,400 full-time employees, so about 4.5 percent of its headcount will be cut by the end of March.
It will result in a pre-tax write-off of as much as $1.9billion in severance pay during the third quarter.
The biggest US mobile carrier said it announced a voluntary separation program for some US-based management positions in June. Over half of the employees concerned will exit in September and the rest by the end of March, according to a securities filing.
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As part of other continuing restructuring initiatives, Verizon said it plans to cease use of some real estate assets and exit non-strategic portions of certain businesses. As a result, the company expects to record pre-tax charges of $230million to $380million in the third quarter.
The news is the latest in a raft of tech sector layoffs that has so far seen more than 137,000 jobs lost globally in 2024 including big names such as Microsoft, Apple, IBM, Cisco, Dell, Intel and many others.
Economic conditions, including inflation and rising interest rates, are largely to blame. In June 2022, US inflation reached a 40-year peak of 9.1%, leading to increased costs for consumers and businesses.
Subsequent interest rises made borrowing more expensive and slowed economic growth, leading to decreased consumer demand and lower sales.
The aftermath of the COVID-19 pandemic saw tech companies aggressively expand, anticipating that demand for the tech services that resulted from WFH (work from home) would continue. They didn’t and as a result, many companies found themselves over-staffed.
