Verizon Plans 13,000 Job Cuts and 179 Store Conversions in Turnaround Plan
Verizon will replace consumer division chief Sowmyanarayan Sampath with interim head Alfonso Villanueva as CEO Dan Schulman’s turnaround plan cuts 13,000 jobs and converts 179 retail stores to franchises. Morgan Stanley raised its price target to $49 from $47, citing improved free cash flow on lower capital spending.
1. Leadership Change
Sowmyanarayan Sampath, Verizon’s consumer division chief, will step down at the end of the first quarter and Alfonso Villanueva, executive vice president and chief transformation officer, will assume interim leadership as part of CEO Dan Schulman’s reorganization.
2. Cost-Cutting Measures
As part of Schulman’s turnaround plan, Verizon will cut 13,000 jobs across the organization and convert 179 corporate-owned retail stores into franchised operations to reduce expenses and streamline its retail footprint.
3. Analyst Outlook
Morgan Stanley raised its price target on Verizon to $49 from $47 while maintaining an Equal Weight rating, highlighting an improved free cash flow outlook driven by lower capital expenditures despite largely unchanged EBITDA forecasts.
4. Lawsuit Against T-Mobile
Verizon Wireless filed a lawsuit against T-Mobile alleging false advertising, claiming T-Mobile overstated annual consumer savings by over 100% on a $1,000 savings promise and seeking unspecified treble damages for the alleged misleading claims.