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Telecom-IT Layoff Tracker: 1H 2017

Layoffs

This summer, instead of enjoying vacations, many IT and telecom professionals likely are out job hunting in the aftermath of layoffs.

The trend of IT and telecom giants trimming expenses continued during the first half of this year as numerous big names announced job cuts. And with CompTIA forecasting a bleak outlook for telecommunications, more job cuts are likely during the remainder of the year.

Our layoff tracker recaps the cuts that have occurred so far this year, whether prompted by M&A or streamlining measures. Companies featured include Oracle, Vonage, Windstream, Microsoft, Rackspace, Zayo and Verizon.

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Windstream

In January, Windstream confirmed it had eliminated 164 jobs in an effort to “efficiently manage the business,” and align resources to current work demands and opportunities. The job cuts were in various workgroups, including engineering, finance and information technology. Twenty-five positions were in Little Rock, Arkansas, where its headquarters is located, and the rest were in various locations across the country.

David Avery, Windstream’s vice president of corporate affairs, told Channel Partners the company has made “great strides repositioning Windstream to better serve our customers.”

Then in February, Windstream said it was cutting 50 jobs over the next 90 days in Rochester, New York, as part of its now-completed acquisition of EarthLink. Those cuts, as well as management appointments, followed a detailed review of overall functions at EarthLink as part of integration planning to identify redundancies in positions and leverage existing workgroups, according to Windstream.

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Oracle

In January, Oracle laid off approximately 450 employees as it continued its shift to the cloud. The layoffs came from the company’s hardware systems division in Santa Clara, California.

“Oracle is refocusing its hardware systems business, and for that reason, has decided to lay off certain of its employees in the Hardware Systems Division,” the company wrote in a letter quoted by the Mercury News.

The company laid off hardware and software developers, as well as technicians, managers and administrative assistants, the newspaper reported. These cuts followed announcements from Oracle about its global cloud expansion.

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Rackspace

In February, Rackspace confirmed it was cutting its U.S. workforce by about 6 percent in areas where its employee count has outpaced revenue. The layoffs affected about 276 of the company’s 4,600 workers in the United States.

In his blog, former Rackspace CEO Taylor Rhodes said the company targeted the cuts “primarily toward our corporate administrative expenses and management layers, while striving to create the least impact to our frontline Fanatical Support and product teams.”

The U.S. layoffs were focused mainly in areas where Rackspace’s workforce has “grown more rapidly than our revenue,” Rhodes said.

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Zayo/Electric Lightwave

After completing its acquisition of Electric Lightwave during the first quarter, Zayo immediately took control and began cutting jobs.

"Zayo is notifying 20 percent of Electric Lightwave's workforce that their positions have been eliminated," Zayo spokesperson Shannon Paulk told the Oregonian. "That includes approximately 10 percent of the workforce at the company's Vancouver (Washington) headquarters. All of the affected employees received severance packages."

In all, Zayo said the layoffs affected 200 of the more than 1,100 people Electric Lightwave employed across the company.

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Vonage

Last month, Vonage confirmed it is eliminating almost 5 percent of its 1,800-plus workforce, or about 90 people. Spokesperson Jo Ann Tizzano told Channel Partners her company has “quickly transformed over the past three years into a leader in cloud communications for business,” noting that Vonage is still actively hiring for other positions.

“As our business continues to evolve, it is our responsibility to our stakeholders to assess the organization to ensure we have the right focus on the right areas to drive continued growth, and to move the business forward with innovation and agility,” she said. “As part of that assessment, we made the decision to eliminate less than 5 percent of our current workforce. These changes eliminate acquisition redundancy, and align with the present needs and future opportunities of our company. Vonage is actively hiring, with open positions exceeding 10 percent of our current workforce.”

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Microsoft

Microsoft is laying off thousands of employees as it implements changes to “better serve” customers and partners. The tech giant confirmed the layoffs in a statement on July 6: “Today, we are taking steps to notify some employees that their jobs are under consideration or that their positions will be eliminated. Like all companies, we evaluate our business on a regular basis. This can result in increased investment in some places and, from time-to-time, re-deployment in others.”

According to a CNBC report, Microsoft announced a major reorganization plan that includes layoffs that will mostly affect sales, and thousands of jobs will be cut. Most of the positions expected to be eliminated are outside of the United States and related to the sales reorganization.

Sheryl Kingstone, research director of customer experience and commerce at 451 Research, said Microsoft is aligning resources for its future. “It needs to focus its efforts on its customers’ demands for cloud services, artificial intelligence and intelligent cloud applications,” she said.

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Looking Ahead

The IT job market should grow at the about the same rate as it did in 2016 even though market growth currently is behind what occurred in the first six months of 2016, according to Janco Associates.

“There continues to be a shrinking of telecommunication jobs,” said Victor Janulaitis, Janco’s CEO. “In the last 12 months alone, there has been a loss of 39,200 telecommunication jobs while the rest of the IT job market (has) expanded by 88,000 new jobs in the same period. “This is a trend that we think will continue for the next few quarters."

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Verizon

Verizon planned to lay off about 2,000 employees when the company officially took over Yahoo last month. Up to 1,000 employees at AOL and Yahoo could be shown the door as Verizon combs through overlapping positions that include marketing, HR and administration, Re/Code reported. A source familiar with the plan told TechCrunch that about 15 percent – equivalent to 2,100 seats – of AOL/Yahoo could be cut.

Verizon plans to combine Yahoo’s internet properties with that of AOL, which the carrier bought for $4.4 billion in 2015. Verizon is battling to compete with Facebook and Alphabet’s Google in digital advertising and is looking to use Yahoo’s various internet tools to drive revenue. The discussed layoffs impact employees deemed redundant in the combined Verizon/AOL unit.


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