FairPoint's voluntary retirement, layoffs reduce costs by $6.6M
FairPoint Communications' (Nasdaq: FRP) recent move to offer voluntary retirement to its union workers and another round of layoff has enabled it to take $6.6 million in costs out of its annual budget.
Last month, the service provider offered its Communications Workers of America (CWA) union employees an early retirement package. Forty-six CWA workers accepted the voluntary program, which went into effect on March 30.
Company leaders believe that the early retirement drive will enable it to save almost $3.8 million in annual operating expenses. Under the program, FairPoint will provide severance payments of about $2.3 million to participating employees.
In addition to the early retirement program, the service provider is laying off 32 non-union employees in an effort to "consolidate operational functions." This will enable it reduce operational expenses by almost $2.8 million.
Paul Sunu, CEO of FairPoint, said that while he feels encouraged with the 8.4 percent gain it made in its broadband subscriber base in 2011, it needs to conduct these initiatives to stay competitive.
"The telecommunications industry is transforming rapidly and FairPoint is positioning itself to compete," Sunu said.
- see the release
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