Verizon Q4 09: Wireline losses drive more job cuts

Verizon's wireline business struggles continued to rear their ugly head in Q4 09. While wireless once again continued to thrive with the addition of 2.2 million mobile subscribers, Verizon's wireline revenues dropped 3.9 percent to $11.5 billion during the quarter.

For Q4 09, Verizon reported a net loss of $653 million versus $1.24 billion in Q4 08. A big contributor to that loss was the $3 billion in charges it had to incur from last year's layoffs. However, overall revenue increased 9.9 percent to $26.1 billion.

Although landline losses of 460,000 subscribers were slightly down from last year, the bigger concern here is that Verizon saw its broadband access revenue and subscriber numbers drop during Q4 09. During the quarter, Verizon added 153,000 FiOS TV subscribers, missing analyst expectations of 200,000. For the year, Verizon failed to meet its 1 million video subscriber addition goal as it only added 943,000 new FiOS TV customers. At the same time, Verizon lost 107,000 DSL subscribers in the quarter, versus only 68,000 in Q4 08.

These factors have driven Verizon to announce that it would cut even more staff from its wireline employee roster. Verizon said it plans to lay off more than 13,000 employees in 2010. In 2009, Verizon let 13,000 employees go, ending the year with 117,000 employees.  

Not everything was doom and gloom on the wireline side, however. One diamond in the wireline rough was the business services segment, which generated $1.6 billion in revenue, a 6 percent increase over Q4 08. What contributed to the business growth was the continued adoption of IP-based services, managed services, Ethernet and security. IP service revenue alone increased 8.6 percent year over year.

For more:
- see the earnings release here [1]
- xChange has this article [2]

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