Verizon Communications Inc. VZ is willing to negotiate with workers unions, representing its wireline and cable workers, which went on strike from Apr 13, 2016. However, the company is yet to find a solution to this porblem.
Verizon and the unions representing the workforce, namely, The Communications Workers of America (CWA) and International Brotherhood of Electrical Workers, are currently at a stalemate over a new labor contract. The company’s wireline employees have been working out of contract since August last year.
The unions have alleged that Verizon is looking to freeze pensions and wants to ease the process of executing layoffs. Moreover, the union pointed out that Verizon seeks to rely less on its permanent workforce and more on contract-based labor, which will allow it to have a higher degree of flexibility to manage its employee base.
Verizon and the unions, representing workers from states such as Massachusetts, Virginia, New York and Rhode Island, have been negotiating over the company’s plan to cut healthcare and pension-related benefits over a three-year period.
The CWA said nearly 40,000 workers have gone on strike. Verizon, however, announced that the figure is approximately 36,000. The company said that it is fully prepared for a strike and has trained thousands of its non-union employees to cope with issues, if any. Verizon has guaranteed full, uncompromised service to its customers during the strike period.
It is crucial for Verizon to ensure smooth operations and continuing service even in the face of a strike. Cable and landline revenues, although not comprising a large share of the pie, are directly related to Verizon’s business customers.
Verizon is already facing competitive threat from its telecom rivals, AT&T Inc. T, T-Mobile US Inc. TMUS and Sprint Corp. S, and any disruption in services can prove to be a catastrophe for the company. Only time will prove how sound the company’s Business Continuity Plans (BCP) are to overcome such adversities. Verizon currently carries a Zacks Rank #4 (Sell).
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