FairPoint to lay off 260 workers, with majority in northern New England

FairPoint Communications announced that it's going to lay off nearly 260 workers across its 17-state footprint, with most of the employees affected by this change residing in its northern New England territory.

In northern New England, the telco will let go 219 employees, which represents over 10 percent of its workforce in the region. Members of both the International Brotherhood of Electrical Workers (IBEW) and the Communications Workers of America (CWA) unions in Maine, New Hampshire and Vermont will be affected by this move.

The telco said in a release announcing the workforce reduction that this action, along with other layoffs it did over the past two years, reflect the level of traditional landline phone subscriber losses it experienced in this period.

"Access lines and legacy revenues are in secular decline, and we are taking these steps to ensure our administrative and operational structures remain aligned with the current size and composition of our business," said Paul Sunu, CEO of FairPoint, in a release.

As voice lines continue to decline, the service provider plans to look for new sources of revenue, including data center and optical Ethernet services. Part of that effort includes hiring additional staff to support its recently announced data center in Manchester, N.H., for example. FairPoint said that it will provide severance based on years of service and will offer outplacement and transition assistance services to eligible employees.

The IBEW and the CWA unions said in a separate statement that these proposed job cuts will further affect service quality in northern New England.

"FairPoint has failed to meet service quality benchmarks for years, and cutting its skilled workforce by more than 10% will only make matters worse," said Peter McLaughlin, business manager of IBEW Local 2327 in Maine.

Similar to its larger ILEC brothers AT&T (NYSE: T) and Verizon (NYSE: VZ), FairPoint has been lobbying state public utility commissions (PUCs) in northern New England to eliminate its Provider of Last Resort (POLR) status. In Maine, the telco supports an amendment that would eliminate the Maine Public Utilities Commission's ability to investigate service quality failures or to enforce standards. Meanwhile, in Vermont an investigation of the company's service quality failures is ongoing.

CWA and IBEW said they will meet with FairPoint to ensure that the layoff process is implemented according to the collective bargaining agreements.

These layoffs come not long after the telco reached a tentative agreement with its union workers in February, ending a four-month strike.

At the same time, speculation has begun to mount about FairPoint's future.

During the first-quarter call, Sunu intimated that it would consider being acquired by another company or possibly purchasing another player itself. Potential suitors for FairPoint could include Frontier Communications. However, Frontier is in the process of purchasing Verizon's lines in three states, making such a deal a challenge for the telco. 

For more:
- see the FairPoint release
- here's the IBEW, CWA release

Related articles:
FairPoint strikes tentative labor deal with IBEW, CWA unions
FairPoint will consider M&A opportunities, CEO says
FairPoint unveils wholesale data center services
FairPoint remains tight-lipped about standalone broadband service pricing

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