Qwest chief executive Ed Mueller said Tuesday that the buyouts offered to 2 percent of the company’s workforce were in response to a slowing economy and consumers moving away from land-line phones.
“We’ve been following the economy. We are not spared,” Mueller said Tuesday. “It’s just a workload thing. We reacted to the load. We don’t have the calls coming in like we used to.”
The company reached an agreement with union officials to offer buyouts to about 700 workers — less than 2 percent of its nationwide workforce — as customers move away from land-line phones. At the end of last year, Denver-based Qwest had about 36,800 employees. The buyouts, which are expected to be completed by March 27, are being offered to workers based on years of service.
Customers are abandoning their home phones for wireless service or digital phone service offered by rivals such as Comcast and Vonage that rely on broadband connections. Qwest lost 9.1 percent of its residential lines in 2007, ending the year with 7.4 million.
The financial impact of the buyout program will be recorded in first-quarter results.
Mueller said the downturn in the housing market is a sign that people are moving less and are less likely to sign up for Qwest services when they move to a new home. He also said the cuts are in line with the company’s strategic initiative to increase productivity and cost efficiency.
At the same time, Qwest is expected to add resources in growth areas. The company is spending $300 million this year to enhance its high-speed Internet network.
“We have stuff that people want,” he said, explaining that faster connections and enhanced services may persuade more customers to stick with the company.
Shares of Qwest rose 4.7 percent Tuesday, up 21 cents to $4.71.
Kimberly S. Johnson: 303-954-1088 or kjohnson@denverpost.com
