Windstream Holdings Inc. said Friday that it is cutting about 400 employees nationwide, including 67 in Arkansas.
The telecommunications company said it will eliminate the positions by March 3 to “increase operational efficiency as it continues to focus on becoming the premier enterprise communications and services provider.”
“Changes that affect people are never easy, but they are necessary for Windstream to succeed in a highly competitive marketplace,” President and Chief Executive Officer Jeff Gardner said in a statement. “We continue to invest in our growth areas, primarily business services and consumer broadband, and at the same time we must maintain a disciplined approach to expense management.”
In the past year, Windstream has been battling shrinking income and a smaller residential customer base. The company provides land line telephone and Internet service to mostly rural customers.
Shares of Windstream fell 9 cents, or 1.1 percent, to close Friday at $7.86 on the Nasdaq stock exchange. The company announced its layoffs midday Friday.
David Avery, a spokesman for Windstream, said in an email that the layoffs in Arkansas include 36 jobs in Little Rock and 30 in Harrison. He said the layoffs affect “all departments within the company.”
Of the positions eliminated, about 175 involved a “voluntary separation initiative,” the company said in a news release.
Windstream, based in Little Rock, employs about 1,400 people in Arkansas and 13,500 nationwide.
The company also said it will incur a charge of $9 million to $10 million in the first quarter as it pays severance benefits.
Scott Hardin, spokesman for the Arkansas Economic Development Commission, said in an email that he did not expect Windstream will have to pay back any incentives to the state because of the layoffs. Windstream was given $5.5 million from the Governor’s Quick Action Fund in 2010.
Barry McCarver, an analyst with Stephens Inc., said the layoffs did not come as a surprise.
“This is not the first time they have had layoffs like this,” McCarver said.
Windstream cut between 375 and 400 workers in 2012 as part of a restructuring. Those layoffs, which affected mainly management positions, were expected to generate $30 million to $40 million in savings.
The latest layoffs are expected to result in annualized savings of about $20 million, Windstream said in a news release.
“A combination of a decline in their residential business, which is caused by competition by [wireless and cable operators], and changes in technology just requires fewer employees to run the business,” McCarver said. “So we expect from time to time that you are going to see the company go through some workforce reduction.”
Some investors have worried in the past year that Windstream wouldn’t be able to pay it’s dividend, but the company has repeatedly said it is committed to it’s $1 annual dividend.
McCarver said the layoffs announced Friday are not related to the company’s financial report. Windstream is scheduled to release its fourth-quarter financial results Thursday.
McCarver said he expects to see slightly better revenue numbers from Windstream during the period, compared with early 2013 when the telecommunications industry as a whole reported weak results.
“The business remains very challenging,” he said.
Front Section, Pages 1 on 02/22/2014