Windstream to Cut Jobs Following Regulatory Censure
Published on: 23rd Feb 2014
USA Arkansas based network communications services company Windstream has agreed to make a payment of USD2.5 million to settle an investigation by the telecoms regulator into its rural call completion practices.
At the same time, and unrelated, apparently, the company announced that it is cutting 400 of its 13,500 employees to cut costs.
In its regulatory agreement, Windstream is making the payment of US$2.5 million, and will designate a senior officer to ensure that the reliability of rural phone calls improves. The company will be monitored for three years as part of the settlement.
"It goes without saying that long-distance calls placed to rural areas - or anywhere - should reach their destination," said Michele Ellison, Chief of the FCC's Enforcement Bureau. "Rural call completion failures jeopardize the fundamental promise that all Americans should have access to reliable communications. If companies don't fulfill this critical responsibility, we will continue to step in."
In news that was announced the following day, the company said that it plans to cut approximately 400 positions by March 3. About 175 of those positions are being eliminated through a voluntary separation initiative. Windstream currently has approximately 13,500 employees.
"Changes that affect people are never easy, but they are necessary for Windstream to succeed in a highly competitive marketplace," said Jeff Gardner, president and chief executive officer of Windstream.
The changes are expected to result in annualized savings of approximately $20 million. The company expects to incur a charge of $9 million to $10 million in the first quarter to pay severance benefits to affected employees.
The company itself did not comment on the regulatory issue.