21,600 workers take Verizon buyout Cost-cutting to compensate for declining residential phone business

NEW YORK – About 21,600 employees accepted a buyout offer from Verizon Communications and will leave the payroll by the end of the week, nearly double the number that the nation’s biggest telephone company estimated last month.

The employees include 5,600 union workers and about 16,000 nonunion managers and administrative staff.

The final count far exceeds Verizon’s estimate last month that more than 12,000 of the 152,000 workers who were offered the buyout were expected to accept the deal.

Verizon is not breaking down the number of workers who accepted offers by state, Peter Reilly, spokesman for Verizon-Maine, said Monday. Because of the number of pending departures, the company likely will reorganize its operations, “and that may involve job movement,” he said.

The buyout, which was not offered to Verizon Wireless’ nearly all-nonunion staff of 40,000, was designed to help accelerate cost-cutting in the company’s shrinking residential telephone business.

“We had a very good rate of volunteers for a variety of reasons,” including a lump-sum payment option and an enhanced pension benefit, said Peter Thonis, a Verizon spokesman. He also noted that the 21,600 voluntary departures exceeds the estimated 15,000 employees who might have been expected to retire or quit over the next two years under normal attrition.

“This drew forward many of the people who would have left anyway over the next few years,” said Thonis. “It reduces the need for involuntary reductions because the cost structure is coming better in line.”

At an investor conference Monday morning, Verizon vice chairman and president Lawrence T. Babbio Jr. said the company still is analyzing data to determine the accounting charge the company needs to record in the fourth quarter to cover the expense of the severance packages.

Babbio also said Verizon will fill a small percentage of the vacancies, but most of the workload shouldered by the departing employees can be handled through productivity improvements or job shifting.