Massive Verizon Layoffs Announced

Verizon launches its biggest layoffs ever. According to Reuters, Verizon's new CEO Dan Schulman is planning the largest layoffs in the company's history. About 15,000 U.S. jobs, roughly 15% of its workforce. Pretty significant cut. Most of the cuts will come from non union managed, shrinking those ranks by more than 20%. Verizon will also convert about 180 corporate owned retail stores and into franchises. The moves could start as soon as next week. Verizon has been losing ground to rivals like AT&T and T Mobile, which are using aggressive discounts and trade in deals to win. Cable companies Comcast and Charter are also bundling wireless with home Internet adding more pressure. Shoban says Verizon must become, quote, simpler, leaner and scrappier. Analysts say the savings are likely aimed at finding or at finding funding, expensive handset subsidies and retention offers. But it's unclear whether job cuts alone can reverse slowing subscriber growth. Verizon's shares rose about 1.5% on the layoffs, even as the stock has badly trailed the broader market in recent years. Okay, so what's the real message here? Another big tech company has laid off thousands and thousands of employees. Verizon's laying off billions of 15,000 employees. Message to you. If you want a nice cushy job with a traditional company, thinking, once I get my foot in the door, I put in my 20, 30 years, I'll have my health care, my benefits, my weekends. I can kind of coast at a place like the phone company. Guess what? It's not going to be there. They are melting away, these opportunities every day. Let's go a little deeper here. I'm old enough to remember growing up and you know, someone found out a neighbor's dad worked for the phone company. That was considered, well, that's pretty good. That's a stable job. Benefits. Back then they even had pensions. And maybe the pension days are long gone. But working for a big telecommunications company was, was seen as a great on ramp to the middle class. Maybe unless you were a CEO or top manager, you didn't make the really big bucks, but you made enough for a nice living. You made enough for a home, maybe a 2,000 square foot home, maybe two cars, maybe one spouse didn't have to work. That's what it meant to have a job. Not just an executive job, an office job. Working on the telephone pole quite often meant a nice solid middle class job and it's being hollowed out. The executives of these companies are going to make seven figures, eight figures, but fewer and fewer middle income jobs. Now that's not Verizon's job. Let me say that that is a function of greater societal forces, technology force, and yes, public policy forces too. I don't want to make it sound like that's nature. Nothing can be done. There's a lot that can be done from a public policy standpoint. Not necessarily forcing Verizon not to fire people, but to do things to make it easier for average. I don't mean this in a condescending way, but average people to have a middle class income because that is something that the right put their finger on and MAGA has embraced. But increasingly Democrats, centrist and those on the more progressive side are focusing on this. This whole issue of affordability relates to this. If you worked for a big cable company, if you worked for a big telecommunications company, a phone company in the past, you might not have had some big net worth or huge portfolio, but you could afford a house, a car, going out to dinner occasionally with your family and maybe a vacation once, or you could afford that. And what's happening across America and other parts of the world too is the bottom 80, sometimes the bottom 90% are saying, now we can't afford it anymore because jobs like this one are disappearing. And how did the market respond? How did investors respond? They said, wait to go. They applauded. The Stock went up 1.5% once it was announced. They were firing a bunch of people. 20% of managers were fired. Now, one thing about big government that people like to talk about and complain is, oh, it's so bloated, all these managers titles. There's no government in the world that's nearly as bloated as a really large corporation. Big companies have tons and tons of managers who sit around in meetings all the time. No one really knows what they do. Half the time they don't know what they do. And believe me, I work with a lot of them. They're all nice people, they're lovely people, they make good PowerPoint slides. But in so many situations, if they were just gone, it wouldn't really have an impact on the bottom line of the company. So more and more companies are realizing this. As much as I'm not a huge fan of Elon Musk and some of his activities of late, he did send a real message to a lot of technology companies and communication companies when he essentially gutted almost all of Twitter when he took it over. Fired incredibly high percentage of engineers and executives and managers, and it really didn't affect their revenues. Much. And ever since then you've seen whether it's Facebook, whether it's Google, it's every company in the world that's in the technology or communication space is saying, how can we fire more and more people and get artificial intelligence to do the job for it? Because in many cases it is doing the job, if not better, certainly a lot less expensively than what humans are doing. Good for the company, good for the shareholders. If you're a retired teacher and your Money's in a 401k and you own one of these companies, it's good for you. It's a mixed bag. It's not all going to the CEO getting $100 billion a year. It does trickle down in other places, but it's very bad for people who had that job, were good at that job, but they're not necessarily superstar. Not everyone can have an MBA from Harvard or be this entrepreneur who goes from nothing to making hundreds of million. The world can't survive under the expectation that that's going to be most people. That's a tiny, teeny, tiny sliver. You judge a society not by how it treats its most successful, most aggressive, most intelligent people can be one's judgment, but you judge it by how does it create a life for the average person and even below average in terms of education, drive, smarts and there was a ton. This is one example where MAGA is right. You look back in the old days, the 1950s, things were better. Now you can quibble about why some would say, well that's back when women knew their place, the minorities weren't seen and the men in coal mines did well, I think that's a false reading of history. If you go back to the 1950s, even early 60s, you had 30% of the workforce in America, private sector workforce in unions. What's so great about unions? You made a lot more money than unions fought for you. You weren't just outsourced to an app, ending up like an Uber driver getting sometimes $2 an hour after you factor in all your expenses. So that's the difference. Our society, our legal structure were different in the 1950s. Was it perfect for women, minorities, gays back? No, but it was a lot better in terms of having a sustained middle class and a way for a lot of so called average people to have a middle class lifestyle in a way that just doesn't exist anymore. I'll point out a few more facts again. 180 corporate stores are shifting to franchises. What does that mean? They find some local guy who thinks, oh, I'm going to be rich and I'm going to own all these franchises and get rich. They're outsourcing the risk because if the store doesn't make a profit, it no longer hurts the company, it's no longer going to hurt Verizon because it's the local franchise guy's problem. Now, you rarely see McDonald's go out of business, but sometimes you do. It doesn't hurt the McDonald's corporation. It hurts the local guy or woman who couldn't figure out how it works. And they're the ones who lost money. So these are trends. You've got to realize it my message to you, if I'm putting my hat on now as your own career coach, you've got to realize there's simply fewer and fewer areas in our economy here in the United States where you can kind of coast. And I apologize if that sounds condescending. If you worked at Verizon and you just got fired, you may be thinking, well, tj, I'm not coasting. Okay, maybe you're working really, really hard. But there are a lot of jobs. There certainly have been a lot of jobs in mid level management at big technology company, big communication energy company, and even today an insurance company where they're just going to be hacked out because artificial intelligence chatbots, in some cases robots, is going to make the job irrelevant. Now don't get too smug if you're on the top because AI could come for you too. The prediction is that AI and robots will ultimately make all of us unemployable and perhaps we'll have enough money, it won't matter. But in the short term, we're going to see more and more people eliminated from jobs if they don't have a unique skill set, if they don't have some cutting edge, some unique advantage. The days of just, hey, I graduated from high school with a B minus average kind of like everyone else. And maybe I took a few courses at the local community college in business. Maybe I didn't. And hey, I'm going to get a job down at the local plant or the factory or the local phone company or the newspaper as a mid level manager and have a nice middle class income, live in a nice middle class house, have two kids, take a vacant. Those days are gone. I hate to tell you, you're going to have to find a unique talent, a unique skill set, a unique value proposition so you can fight off competition from AI and everyone else. If that sounds dystopian, I do apologize. There's a lot of opportunity, but it's opportunity where you're going to have to be much more aggressive or you may just be out of luck.