Job cuts expected to cost $7.5M, save $20M per year
Cloud computing and mobile broadband provider Windstream announced plans to cut 350 jobs over the next two weeks in a move to “improve its cost structure and operate more efficiently.”
The cuts will include 120 positions through a “voluntary buyout initiative,” with the rest apparently not so voluntary. Windstream noted that it currently employs about 13,000 people, thus the cuts would impact less than 3% of its total workforce. The cuts are expected to cost the company a one-time charge of $7.5 million, although save it approximately $20 million on an annual basis.
Windstream said the latest cuts were related to continued integration of Paetec Holdings, which Windstream acquired for $2.3 billion in 2011.
“Today’s actions are difficult, but necessary to effectively manage costs,” explained Jeff Gardner, president and CEO at Windstream. “While we are eliminating certain roles across the company, we continue to invest in strategic areas of our business to grow revenue, better serve customers and create value for shareholders.”
Windstream earlier this month reported a 74% drop in third-quarter income compared with the previous year, on a 3% dip in overall revenue. Windstream’s stock price (WIN) is up nearly 33% for the year.
According to Arkansas Business, Gardner was paid more than $7 million in compensation last year, which was down approximately $1 million from his 2012 compensation.
Windstream earlier this year announced plans to cut approximately 400 positions, with 175 of those coming through buyouts. Those cuts were reported to have cost the company up to $10 million in one-time charges, but project up to $20 million in annual savings.
Windstream this past summer announced plans to spin off some of its assets into a real estate investment trust in a move to garner more favorable tax treatment on dividend payments. The company said the savings would be used to expand availability of its 10 megabits per second and 24 Mbps speeds throughout its footprint.
Despite the planned cuts, Windstream has dozens of open positions posted on its website.
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