Posted 2/21/2014 01:17 pm
Updated 7 months ago
Windstream Holdings Inc. of Little Rock said Friday that it is cutting 400 employees companywide by March 3.
The publicly traded telecommunications firm, which reports quarterly earnings on Thursday, said the move affects 67 positions in Arkansas, including 36 in Little Rock. In all, Windstream has 13,500 employees, including about 1,300 in Arkansas.
Of the 400 positions, Windstream said 175 are being eliminated "through a voluntary separation initiative." Affected employees will get outplacement counseling, the company said.
Windstream said the cuts are necessary to "increase operational efficiency."
"Changes that affect people are never easy, but they are necessary for Windstream to succeed in a highly competitive marketplace," Jeff Gardner, president and CEO, said. "We continue to invest in our growth areas, primarily business services and consumer broadband, and at the same time we must maintain a disciplined approach to expense management."
Windstream expects the changes to result in annualized savings of about $20 million. The company expects to incur a charge of $9 million to $10 million in the first quarter to pay severance benefits to affected employees.
A Windstream spokesman told Arkanss Business that the cuts involve "all departments within the company" and are "spread out across the country."
"We take a very disciplined approach to managing expenses while investing in the growth areas of our business," the spokesman said. "This initiative was necessary as we proactively manage the transformation of our business model."
Windstream's last significant layoff was announced in May 2012. The company cut about 400 management jobs about six months after completing its merger with Paetec Holding Corp. of Fairport, N.Y. The $2.3 billion acquisition was Windstream’s biggest.
Windstream said those cuts were part of a restructuring of its management ranks "to increase the efficiency of decision-making."
In November, Windstream reported third-quarter net income of $31 million, down 34 percent from the same quarter last year. Revenue was $1.50 billion, down 2 percent from the same quarter last year and missing analysts' estimates of $1.51 billion.
The telecommunications firm was spun off from Alltel Corp. in 2006. Born as a rural wireline telecommunications services provider, the company has increasing focused on growing communication services designed for businesses, including cloud computing, and broadband Internet.