An agreement between Verizon Communications Inc and unions potentially ending a nearly seven-week strike includes 1,400 new jobs and pay raises topping 10 percent, the company and unions representing about 40,000 workers said on Monday.
Verizon, the No. 1 U.S. wireless provider, and the Communications Workers of America (CWA) had reached a tentative deal on Friday. Details for the new four-year contract were disclosed on Monday.
The CWA said Verizon agreed to provide a 10.9 percent raise over four years while Verizon put the increase at 10.5 percent. According to the CWA, both numbers are correct, with the calculation done by the union including compounded interest that workers would receive as subsequent raises are determined from a new base salary.
Nearly 40,000 network technicians and customer service representatives of the company's Fios internet, telephone and television services units walked off the job on April 13.
Striking workers will be back on the job on Wednesday, the CWA said.
The deal was "very rich" for Verizon workers and was likely a prelude to the company exiting the wireline telecommunications business, transforming into a wireless internet business, said analyst Roger Entner of Recon Analytics.
“They needed to end the strike and they bit the bullet. In my opinion it reinforced their commitment to basically exiting the least profitable, most problematic part of the business.”
The new contract "gives Verizon four years basically to get rid of the unit. Let it be somebody else’s problem,” Entner added.
The workers have been without a contract since the agreement expired in August and healthcare coverage ran out at the end of April. In 2011, Verizon workers went on strike for two weeks after negotiations were deadlocked.
The latest work stoppage stretched across several U.S. East Coast states, including New York, Massachusetts and Virginia. Verizon brought in thousands of temporary workers to avoid service disruptions.
New York-based Verizon will add 1,300 new call center jobs on the East Coast, and 100 new network technician jobs, Verizon spokesman Richard Young said.
It will withdraw proposed cuts to pensions as well as reductions in accident and disability benefits. The company, however, won cost savings through changes in healthcare plans and limits on post-retirement health benefits.
If union members ratify the agreement, the new contract would run until August 2019.
Verizon worker Fitzgerald Boyce, 45, said he was likely to vote in favor of the agreement.
"Of course I am extremely relieved that we have a good contract from what I am reading," said Boyce, a field technician who lives in Brooklyn, New York. "To be able to keep our benefits and actually increase the number of union jobs is a great thing."
Verizon and the two striking unions were in contract discussions with the help of the U.S. Department of Labor. In mid-May, U.S. Labor Secretary Thomas Perez brought the parties back to the negotiating table.
The strike, one of the largest in recent years in the United States, drew support from Democratic U.S. Presidential candidates Bernie Sanders and Hillary Clinton.
SHIFT TO MOBILE
Verizon has shifted its focus in recent years to mobile video and advertising, while scaling back its Fios television and internet services. To tap new revenue, it is boosting its advertising-supported internet business and acquired AOL for $4.4 billion.
Verizon, which claims a high-quality cell network, is locked in a battle for subscribers with competitors AT&T Inc, Sprint Corp and T-Mobile US Inc in a saturated U.S. wireless market.
Verizon's legacy wireline business generated about 29 percent of company revenue in 2015, down about 60 percent since 2000, and less than 7 percent of operating income.
Verizon Chief Executive Officer Lowell McAdam said last week the strike could hurt second-quarter results.
Verizon shares closed up 1 percent at $50.62 on Friday and are up 9.5 percent for the year, near its 52-week high of $54.49. U.S. markets were closed on Monday for the U.S. Memorial Day holiday.
(Reporting by Amrutha Gayathri in Bengaluru, and Daniel Trotta and Chuck Mikolajczak in New York, Writing by Nick Zieminski; Editing by Jeffrey Benkoe)
This story has not been edited by Firstpost staff and is generated by auto-feed.
Published Date: May 31, 2016 12:30 am | Updated Date: May 31, 2016 12:30 am