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Verizon To Cut 13,000 More Wireline Jobs; Sees No Wireless Capacity Issues From Smart Phones

Barron’s

By Eric Savitz

January 27, 2010

They now do it every year.

In 2008, Verizon (VZ) cut 13,000 jobs from its shrinking wireline business.

In 2009, they cut another 13,000.

And this year? As CEO Ivan Seidenberg said on a conference call with the Street this morning after the company reported Q4 results, there will be another 13,000 reductions in 2010. The Verizon wireline business had 117,000 employees as of the end of 2009.

The number is scary, but no surprise; like AT&T (T) and Qwest (Q), Verizon has been routinely reporting 10%-plus annual declines in residential wireline subscribers, as consumers go wireless only.

Meanwhile, Seidenberg said the company has taken steps to avoid kind of capacity constraints that recently have plagued AT&T data customers in some markets where there is particularly heavy concentrations of Apple iPhone users:

We have done a lot of work in modeling what the DROID does, what the Palm will do, what the Eris does and what the BlackBerry does. So we feel we know what the capacity limitations are in this, and we are feeling pretty good that we are out in front of this issue. And to the extent that usage picks up, I think our guys have done a very good job in making sure that we stay in front of that issue. And I know most investors are worried about that. But over the course of the last 10 years, this is what we pride ourselves on doing. So I’m comfortable that we are in good shape on this.

We’ve spent a lot more capital in the last two years on capacity than probably people realize. And I think, when you look out, as we move into 2011 and we start to get into full deployment of LTE, we’re going to get a big, big improvement in terms of our efficiency. And so we are feeling good about that. So I wouldn’t think there’s anything to worry about on the capital. When something comes along that would drive us to suggest we need to spend more, we’ll tell you. I don’t think at this point there’s anything to worry about.

VZ today is down 61 cents, or 2%, to $30.07.