SureWest (NasdaqGM: SURW) may be making good on its broadband service promise, but continual declines in its landline POTS service--a common theme amongst all ILECs--has driven it to lay off 60 employees, or seven percent of its overall workforce.
Among the job cuts will be 45 employees in its hometown Sacramento market and eight employees in its Kansas City region. The job cuts follow a flat Q1 earnings cycle where SureWest reported declines in not only its traditional phone service, but also business services-factors it attributes to the struggling economy.
"Like many others in our industry, SureWest has been impacted by the trend of declining telecom revenues from traditional telephone line losses and diminishing regulatory subsidies that companies like ours have depended on for years," said Steve Oldham, SureWest's president and chief executive officer in a release. "While our broadband segment is doing very well, we must address the reality of the telecom industry, coupled with the effects of today's current economic environment."
With these job cuts, SureWest believes it will be able to save about $1 million in 2010 and $5 million by 2011. In addition, the service provider believes it can incur restructuring charges for severance and related costs of about $1.7 million in Q2 2010.
At the same time, the service provider is beefing up its broadband customer service force. Since Janurary 2010, SureWest beefed up its residential sales force in both its Sacramento and Kansas City markets with the addition of 11 new employees to promote its triple-play (voice, video and data) service bundle. Likewise, SureWest is maintaining the employee headcount in its customer care operations centers to ensure customer satisfaction.
- see the release here
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