Verizon's (NYSE: VZ) wireline workers represented by the Communications Workers of America (CWA) and the International Brotherhood of Electrical Workers (IBEW) will return to work on Wednesday, June 1 after reaching a tentative agreement with the company on Friday.
The company noted employees with evening shifts that go past midnight on June 1 will return to their job at the beginning of their shifts on Tuesday, May 31.
As part of the tentative four-year agreement the two sides reached on Friday, Verizon is offering wireline workers a number of new provisions including: a 10.9 percent raise, a $1250 signing bonus in the Mid-Atlantic and a $1000 signing bonus plus a $250 healthcare reimbursement account in the Northeast, $2800 minimum in profit sharing, pension increases, and the first contract for Verizon Wireless retail store employees in Brooklyn, New York and Everett, Massachusetts.
Additionally, Verizon said it would maintain work for union members in their communities and return a large amount of pole maintenance work to union employees in New York state. Verizon pledged to increase the number of unionized crews doing pole work in New York by 25 percent.
CWA and IBEW union members will vote on the tentative contract by June 17, which will end in 2019.
One CWA member who plans to vote to approve the agreement is Fitzgerald Boyce, a New York-based Verizon field technician.
"Striking wasn't an easy decision for our families, but we knew that we had to fight to save good jobs and our way of life," Boyce said in CWA release. "We fought hard and we won."
When the new contract is approved, financial analysts expect that the company will be able to achieve longer-term savings.
"While there likely will be some impact on Q2 financials related to the strike ... the savings that should result from this Strike outweigh the near term distractions, in our view," said Jennifer Fritzsche, senior analyst for Wells Fargo, in a research note. "We would expect more quantitative details related to these savings to come from the company when it reports Q2 2016 earnings (late July) if not sooner."
However, the impact will definitely be felt on the FiOS broadband and TV subscriber side as the company had to delay new installations during the strike so it could focus attention on necessary maintenance.
Wells Fargo previously lowered Verizon's wireline revenue estimates for the upcoming second quarter by $343 million to $7.52 billion.
Fran Shammo, CFO and EVP of Verizon, recently told investors during the MoffettNathanson Media & Communications Summit that new "installs and new orders have significantly dropped" during the strike.
- see the CWA release
- WSJ has this article
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