21,600 take Verizon's buyout offer

The final tally of those who took the retirement offer -- 5,600 union workers and 16,000 managers -- was far above the 12,000 predicted by Verizon chief executive Ivan G. Seidenberg last month. The company said it will take a "significant" but as-yet unspecified charge against its earnings this quarter to cover the cost, but Verizon officials predicted that customers will not see any impact on reliability or service.

"We are confident of our ability to manage this transition successfully without impacting customer service," Verizon spokesman Jack Hoey said. Although Verizon will probably replace "a small percentage" of the 21,600 jobs being cut and move some union workers up to first-level management positions, Hoey said, the advancements would be mostly in fast-growing areas such as high-speed Internet services rather than in the local phone business, which has been shrinking for more than two years.

But Don Trementozzi, president of Local 1400 of the Communications Workers of America, which represents 1,550 Verizon call-center workers in New England, said, "We're concerned that it will definitely have a direct impact on our customers, to the point that we could lose to competition. I know they didn't expect this many managers to take the offer, and this looks like a step in the wrong direction with this many people leaving. It's a mystery how they're even running this company today. We're down to bare-bones staffing."

The company did not offer early retirement to any of the 40,000 workers at Verizon Wireless, which has been growing by double digits and now ranks as the largest US cellphone company.

Verizon's early retirement deal offers a 5 percent increase in pension benefits and generally gives an extra $10,000 one-time severance benefit to union workers and $15,000 to $30,000 to managers.

"It's a very big number, and it suggests that we are in a turbulent time," said John Christmas of Challenger, Gray & Christmas, an Illinois outplacement consulting firm. "There's been some hope that job creation was starting to outrun the job losses in the economy, which it has for a few months, but this is a dramatic indicator that the job loss has far from disappeared."

Revenues for Verizon's core local phone business have dropped at an annualized rate of $4 billion over the last three years, as the company faces more and more competition from wireless carriers, e-mail, and local services offered by AT&T, MCI, and other competitive carriers. The number of second phone lines used for Net access has also dropped steeply as consumers flock to broadband Net access offered by cable companies.

"A lot of these managers understand that the industry is ill structured," said John Krause, an analyst at Thrivent Financial for Lutherans, which owns 1.9 million Verizon shares. "They see the writing on the wall: Verizon needs to cut costs." Managers at Verizon can generally retire with a full pension and medical benefits if they are at least 55 years old and have worked for the company for more than 20 years.

Since 2001, counting the retirements announced yesterday that take effect at the end of this week, Verizon has cut 48,600 jobs, reducing the company's total employment to 199,400.

"Investors have to be pleased by the number of people that are taking the buyout," said analyst Patrick Comack of Guzman & Co. in Coral Gables, Fla. "It's much higher than expected" and will give Verizon more flexibility to control costs.

In New York Stock Exchange trading yesterday, Verizon shares rose 13 cents to close at $32.74.

Hoey said the enhanced retirement benefits were far from the most generous offered by Verizon or its predecessor companies including New England Telephone, Bell Atlantic, and GTE. In 1994, for example, Verizon let managers add both six years to their age and six years to their length of service to calculate their pension benefits. Verizon had not offered a retirement incentive plan to its non-union employees since before the July 2000 GTE-Bell Atlantic merger that created Verizon, which now ranks as the largest US telecom company.

Peter J. Howe can be reached at howe@globe.com. Material from Globe wire services was used in this report.