SureWest Communications, the Roseville, Calif.-based ILEC, said this week it’s laying off 7 percent of its workforce as more customers axe their landline service. The provider then will concentrate on boosting residential and commercial broadband subscribership.
SureWest will cut 60 jobs total – 45 in the Sacramento market, eight in the Kansas City area and seven open positions that have gone unfilled. The action affects workers including managers and supervisors.
SureWest President and CEO Steve Oldham said the decision comes as SureWest loses money in its traditional telecom division and as fewer regulatory subsidies – “that companies like ours have depended on for years” – fill the coffers. And, he added, “While our broadband segment is doing very well, we must address the reality of the telecom industry, coupled with the effects of today’s … economic environment.”
Employees impacted by the layoffs will receive severance packages; because of that, SureWest expects to record about $1.7 million in restructuring charges during the second quarter. However, the jobs decision should save the carrier at least $5 million annually starting next year and $1 million in cash this year. SureWest further anticipates saving another $1 million as it reduces consulting and advisory services.
Despite the bad news for landline workers, SureWest plans to keep hiring in its broadband unit. Since January, the provider has added 11 direct sales reps who hawk residential television, Internet and VoIP access.
