The Trump administration’s argument that its corporate tax cuts will grow jobs appears to be getting flimsier by the day.
On Monday, Reuters reported that telecommunications giant Verizon will be eliminating 10,400 positions in the coming year as part of its “voluntary separation” program. The workers will be compensated with roughly a year’s salary, however, and will be getting bonuses and benefits depending on how long they’ve been with the company.
The employees including in the voluntary separation agreement are management-level employees. Verizon spokesperson Robert Varettoni was careful to state that the elimination of these jobs aren’t layoffs, but voluntary offers made to employees ahead of time.
“This voluntary program will help enable a more efficient organization — broader spans of control and fewer organizational layers,” Varettoni told Grit Post. “It expedites the building of an innovative model for our future.”
Verizon is expected to pour billions into growing its 5G infrastructure in the coming years, according to Reuters, and the company argues the additional investment is necessary to continue adequately serving its customers.
“These changes are well-planned and anticipated, and they will be seamless to our customers,” Verizon CEO Hans Vestberg said in a public statement. “This is a moment in time, given our financial and operational strength, to begin to better serve customers with more agility, speed and flexibility.”
However, the elimination of the jobs comes after the company reaped savings of up to $4 billion as a result of the tax cut package President Trump and Congressional Republicans passed at the end of 2017. Bloomberg reported that Verizon made more than $127 billion in gross revenue last year, with a net profit of $18.7 billion. The company paid its top five executives roughly $54 million in total compensation last year, according to filings the company submitted to the Securities and Exchange Commission (SEC).
Varettoni countered that Verizon, in a January 2018 statement, announced it would invest its tax savings in paying down corporate debt, contribute to employee pensions, donate to philanthropic efforts, and offer stock to a majority of its workers.
“Through the first 3 quarters of 2018, the company has reduced debt by $4.2 billion, and made discretionary contributions of $1.7 billion to employee benefit programs. We’ve also returned $7.3 billion to shareowners in dividends, and invested more than $12 billion in capital as we enter the 5G era,” Varettoni said.
The employees working in the positions that will be eliminated in the company’s restructuring efforts will be leaving the company either at the end of December, the end of the first quarter of 2019, or the end of the second quarter next year, depending on Verizon’s needs.
Verizon isn’t the only major corporation that benefited from Trump’s tax cuts that’s eliminating jobs. Last month, Union Pacific announced hundreds of layoffs despite getting $6 billion from the tax cuts.
Carl Gibson is a politics contributor for Grit Post. His work has previously been published in The Guardian, The Washington Post, The Houston Chronicle, Al-Jazeera America, and NPR, among others. Follow him on Twitter @crgibs or send him an email at carl at gritpost dot com.