Special thanks to Source One Management Services for this guest post
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The Verizon Business strike that started on April 13, 2016 may now be over. But that does not make it old news for Verizon customers. The strike has caused many problems for all people involved including Verizon’s current and future customers, and of course Verizon Business. The list of union worker’s complaints was long, including Verizon’s offshoring thousands of jobs; outsourcing work to low-wage, non-union contractors; the closing of call centers in the U.S.; and being forced to work in locations far from home for months at a time with short notice.
The union represents workers of Verizon’s wireline operations, which include the company’s landline, high-speed Internet, and television services. These services are mostly available only in the Northeast, including Massachusetts, Rhode Island, and the region from southern New York to Virginia. Verizon offers home wireline services in parts of nine states, serving about 15 million phone lines. The unionized workers perform a range of tasks such as fixing a phone line that’s out of service, installing new phone and broadband internet lines, or fielding customer support calls.
Regarding the effects of the strike, Verizon continued to perform necessary maintenance and service installation by having other employees filling in at call centers, outside plant and other network operation functions. However, the telecom giant saw major disruption as a result of their smaller workforce. The company had only trained approximately 10,000 employees to fill in for the nearly 36,000 workers who went on strike. In any given week, Verizon conducts about 30,000 to 35,000 installations. New FiOS Internet and TV customers saw service installation delays.
Verizon has long argued that it needed to cut costs and increase its flexibility to manage its work force to preserve the competitiveness of its wireline business. That business, which employs the overwhelming majority of the striking workers, has declined in profitability in recent years as mobile phone service and hand-held devices have gained popularity. Many of the company’s competitors are not unionized and, therefore, better able to rein in labor costs. For this reason it is believed that Verizon’s interest in maintaining its wireline business is declining because the labor costs are much higher than the costs for its wireless business, which is majority nonunion.
This should be a cause for concern for Verizon’s current customers. All consumers and large/small businesses need to be aware and watch closely to the changes Verizon is making to their wireline business. They recently sold landlines in 14 states to Frontier; a deal that was originally only anticipated to consist of three states. Divestures could continue as Verizon steadies focus on wireless services. As for the impact on formerly Verizon turn Frontier customers, now’s the ideal time to revisit existing contracts and services.
Even though both Frontier and Verizon were excited to share the news about this deal, all customers located within these 14 states should be weary. Transitions such as these can easily turn into a disaster. It can cause outages, billing problems, and difficulties with any on-demand content for customers. For these reasons many people may want to look to other providers for the same services. This can be done by going to market and running an RFP to see what other options are out there. Also, customers could take a closer look at their current contract and pricing. This would be a good time to negotiate for better rates with your new incumbent as well as perform a telecom audit of the services you are currently purchasing to see if any are unnecessary or no longer being used.
Even though Verizon workers returned to work Wednesday, June 1st, they still had to ratify the new four-year contract which was completed on June 17th. The Communications Workers of America and the International Brotherhood of Electrical Workers said that their striking members had voted “overwhelmingly” for the contract. However, it will be interesting to see what Verizon does with their wireline business; if they continue to sell off certain portions of it to other telco companies or compete for more wireline business into the decade.
While the strike, temporary reduction in Verizon’s workforce, and renegotiated union contract terms may not directly impact business customers, it is symptomatic of a larger issue. As Verizon refocuses its service offering, there are more changes to come for customers- creating an imperative for purchasers to pay attention to the industry shifts. All too often, changes in the market go unnoticed – leaving businesses to remain in outdated contracts and overpaying for services.