Forbes has a very interesting piece on the costs traditional telecommunications providers will have to pay for health care and pension.
This comes at a time when many of these companies are facing a large number of staff retirements, and the more established telecommunications companies generally offered generous voluntary early retirement packages rather than layoffs to many in their work force during economic downturns and elimination of redundancies following mergers. Watch this space once the AT&T and SBC merger is completed, both former Bell system companies with long-serving companies. There will likely be some generous early retirement package offers for both AT&T and SBC employees determined to be redundant.
Verizon have it somewhat easier, because they are buying MCI’s business more than their people. Any redundancies are likely to result in a layoff on the MCI side of the fence the vast majority of the time. Lucky for Verizon the MCI approach to laid off employees has always been a minimal severance and a hearty farewell of “Don’t let the door hit your ass on the way out!” Expectations will be much lower among those MCI employees made redundant.
Redundancies aside, this comes at a very bad time for the telecommunications industry. At the same time that new market entrants are coming into their space with a minimal capital expense and smaller workforces with less generous benefit packages. Meanwhile the incumbents carry their retirees on their backs, complete with pensions and healthcare. At the same time they have all the capital expenses associated with maintaining facilities. We should probably expect the Bell companies to raise the volume of their objections to municipal Wi-Fi and objections to network neutrality at the application layer. I hope Google, eBay, Yahoo and Earthlink have good representation in Washington.
