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CenturyLink Layoffs 2018: Balancing Staff Cuts, Big CTL Stock Dividend

CenturyLink Exiting CEO Glen Post

CenturyLink’s Next CEO: Jeff Storey

CenturyLink layoffs will impact about 1,000 employees or roughly 2 percent of the telecom giant’s workforce, the company has confirmed. The cuts come as CenturyLink strives to invest for growth, integrate the Level 3 acquisition, and pay a massive dividend that currently yields more than 11 percent annually to shareholders.

CenturyLink blamed the cuts on redundancies from the recent Level 3 Communications acquisition. However, the Communications Workers of America District 7, which represents more than 11,000 CenturyLink workers, criticized the cuts — especially amid recent corporate tax cuts and executive bonuses within the company.

In CenturyLink’s defense: Just because a company can afford workers that doesn’t necessarily mean the business should necessarily retain those workers, especially if the positions are truly redundant following an M&A deal.

In terms of channel partner strategy, the CenturyLink-Level 3 business combination is going very well, according to John DeLozier, CenturyLink’s vice president of strategic partners and alliances. The company also has been ramping up a small business sales center.

CenturyLink’s Big Dividend: Protecting the Golden Goose for Investors

The bigger issue for all observers going forward could be CenturyLink’s dividend — which delivers a very lofty 11.68 percent annual yield as of May 6, according to Yahoo Finance.

During a quarterly earnings call back in February 2018, exiting CEO Glen Post indicated that CenturyLink’s principal operational focus is to “drive long-term profitable revenue growth and free cash flow generation so that we can both continue to invest in our business and sustain our strong dividend. We are prioritizing our investments and operational initiatives that we believe will help support that outcome.”

During that same February earnings call, CFO Sunit Patel pulled back the curtain a bit more on CenturyLink’s expected cash flow and associated dividend payments. At the time, he stated:

“Excluding integration-related expenses for the full-year 2018, we expect free cash flow before the dividend of $3.15 billion to $3.35 billion. In addition, we expect free cash flow after the dividend of $850 million to $1.05 billion. Given our confidence in our cash flow profile, over the next few years, we remain committed to the dividend.”

The free cash flow outlook assumes a $100 million pension contribution in 2018, in line with CenturyLink’s contribution level in 2017, he added.

CenturyLink Shareholder Meeting, CEO Transition

The responsibility for paying that dividend will soon shift from CEO Glen Post to his successor, CEO Jeff Storey. Storey will succeed Post at a shareholder meeting this month — far sooner than the original 2019 CEO succession plan that the company announced last year.

The shareholder meeting appears set for May 23.

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17 Comments

Comments

    CenturyLink Employee:

    I am a Network Technician for CenturyLink. I can tell you without a doubt that the company is not speaking the truth regarding the need for cuts because of redundancy. There are ZERO technicians from Level 3 that are doing the same job as the CTL Network Technicians. We have seen ZERO technicians from Level 3 nor have we even met any employees from Level 3. The job cuts were to the field personnel, i.e. technicians, central office technicians, broadband technicians. None of these positions have been filled or employed by Level 3 employees ever. The company is not speaking the truth about the reasoning of the layoffs.

    Mac Donald:

    This entire merger was planned long time ago. All the reasons given to the press were pre-written. The new Level3 management team has a business philosophy , ” LAYOFF ” , ” RIF ” as much as possible. The fact is this merger was contingent on coast savings which means they promised to Wall Steet, a certain amount of synergies , hundreds of millions. There are zero copper pairs , DSL and private residence customers in the Legacy Level3 network. The overlapping job functions are simply not in this area , so why are they laying off CWA, IBEW people ? . Level3 ? CenturyLink has Metro rings in certain cities and where there is an overlapping Network the justice dept told them these had to be sold. Companies such as Integra will resell services to business customers using The CenturyLink local network but Level3 has never entered this type of market. Their Field techs work primarily with big business installing routers and switches using fiber optic jumpers. In this area there is a very very small overlap of job functions .

    Takenout3x:

    Yep for as long as Level3 has been in existence it’s been a layoff culture….even the days of Black Friday where there were rolling monthly layoffs one Friday out of the month and we would wait in cube for the “all” clear. The culture is pure hell and oozes nothing but greed and politics…..they will kick the can down the road until they have to buy someone else to restructure debt and just keep building corporate debt we all eventually pay for while all the fat cats get …….fat

    Colorado2018:

    No redundancy for our jobs they are targeting older and medical cost using employees.

      Ellen.cruelvilla:

      Targeting 40 and older Centurylink employees not Level3 employees

    #boycottbigtelecoms:

    Former TW Telecom tech here. Once Level 3 took over we knew it was going to be horrible. The dust hadn’t even cleared when CTL took over Level 3. TWT was a great environment to work in. Level 3 and CTL are two horribly run companies. When they merged it was like two WWII dictators having a baby. So here we are, as expected, watching colleagues get their employment terminated. Those that remain are pressed to ‘do more with less’. The culture within CTL and Level3 is depressing and demotivating to say the least. CTL continues to bring on offshore contractors who are not being trained. The job functions that they perform have been dumbed down so much that they have no clue what happens when they click this button or that one. I’m embarrassed to tell friends and family what company i work for. I think the best thing though is to continue to take this companies money. Verizon, AT&T, CTL, Comcast, etc, are what’s wrong with this industry. These companies have such a great opportunity to take this industry into the future, to really be on the cutting edge of technology along with employment motivations and talent retention. They continue to reward their C-Level douche bags. Their internal bureaucratic processes are absolutely atrocious and cause delay after delay.

    -rant over-

    CenturyLink employee for now:

    The layoffs are not redundant. They are just shutting down whole departments and not replacing them with systems or people.

    Whatever they are doing is just chaos.

    Noone Important:

    Same here I’m no longer proud to work there. I’m in sales and its affecting our side too. Stores constantly closing so why would I want to move up? Quotas are unrealistic and I make less and less money every year. I’ve definitely experienced the corporate greed first hand. And I feel terrible for my friends in the field for being put in this position. And oh God don’t even get me started on the complaints we get from call centers and outsourcing that has not improved.

    Jason:

    Contractor world no more unions is what they are pushing for. 2022 I almost guarantee half work is contracted out.

    Kyle:

    Need to get rid of the old guys who only do minimal work. Need to go pay per job save company from squatters and milk men.

    Allen Jones:

    As an ex-employee of CenturyLink/Qwest, I think I can safely say that investors were better off before Centurylink started taking on acquisition debt and gutting the business for dividends. This turd has nothing left to acquire and never had a product to sell that it didn’t buy elsewhere. Glen Post is the poster boy for buying success until the Qwest deal.

    mark:

    Core network engineers were laid off in Winter Park and Apopka yesterday. That area of support doesn’t exist with L3. Zero redundancy and simply reducing headcount. We were told “this is nowhere near over”. Appears L3 simply wants to slice the Legacy Embarq portion off with personnel. Contractors and automated systems is the future. Keep a VERY current resume’ handy at all times. The depth of these cuts will grow deeper. Good luck to the remaining employees.

    Jim:

    Centurylink is a failing organization and now is teamed with Level 3 another failed organization = DISASTER

    #truth:

    It’s not redundant jobs. It’s the people who cost them in healthcare, disability, benefits (wrap rate) aka $Money$. This is a money hungry company that is in survival mode to pay off major debts and big bonuses to a few.

    Those I saw laid off the same day as I was were those who over the past year used disability for surgeries/pregnancies etc., make decent $ for their positions, have health insurance with the company (right now they pay half and it’s still expensive for the employees)! Additionally, I have about 2 weeks planned time off on the books without all the leave already built up. They don’t like employees who actually use the benefits they offer. Some of my coworkers spoke of an environment where they feared taking off time or did only for “sick” days to catch up on sleep/errands or not have to commute.

      Rick:

      The only redundants is all those extra L3 management, directors and VP’s from Level3 . A Level3 employee told me they are cutting all the lazy Centurylink employees

    Glen don’t care post:

    New CEO from Level3 is still laying off only Centurylink employees and wants to keep only former Level3 employees. In four weeks he has let go 2000 Centurylink 40 and older employees

    No loyalty:

    Glen sold out to a big pay out and don’t care less about the company as big layoffs of 40 and older Centurylink employees . Level3 the layoff company has taken over and paying all its Level3 executives big pay checks and bonuses.

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