Planned FairPoint Layoffs Are Part Of A Long Series Of Job Reductions

Dec 14, 2016

Sen. Bernie Sanders and Rep. Peter Welch are calling on FairPoint Communications and the company that hopes to purchase it to cancel a round of layoffs scheduled for the end of the month.

FairPoint says 110 workers will be laid off, although the unions say the number is higher. 

The layoffs are part of an ongoing pattern of job cuts at the company.

The layoff announcement came before Consolidated Communications Holdings of Illinois said it plans to purchase FairPoint, pending the approval of regulators.

The company Consolidated Communications hopes to purchase will be much smaller than the FairPoint that bought Verizon’s land line service in 2008.

Since then, the reduction in FairPoint’s workforce has been dramatic.

In 2008, FairPoint had roughly 4,000 employees. After the latest round of layoffs it will have about 2,500, about 37 percent fewer employees than eight years ago.

In a statement, FairPoint says despite the downsizing it has invested more than $900 million in northern New England.

It explains the loss of 1,500 jobs this way:

“The realities of rapidly evolving technology, changing consumer preferences and an ever-more-competitive telecommunications landscape have led to a significant decline in our legacy services and revenues. As any prudent business would, we have reduced our workforce to match our workload and the size and composition of our revenue.”

But Mike Spillane of the International Brotherhood of Electrical Workers in Vermont, whose members include FairPoint service technicians, says it doesn’t look that way from where his members stand.

“Our people have been forced to take on more work, forced to work overtime. Meeting customer needs has become a challenge. We’re spread very thin,” Spillane says.

A renegotiated union contract during a strike two years ago put FairPoint in a better position to cut costs and eliminate more jobs.

“The new provisions of the collective bargaining agreements allowed for a more streamlined layoff process with lower severance costs than in the past,” FairPoint CEO Paul Sunu explained in a quarterly earnings conference call last year.

The 2015 collective bargaining agreement saved FairPoint $700 million in benefits for retired workers.

Spillane says in cutting union workers' benefits FairPoint made itself an attractive buy at the expense of its employees.

“The last contract they did a nice job of stripping our retiree health care away and limiting our pension and creating cash flow for themselves now to put themselves in a better position,” he says.

The battle over the contract was long and contentious. FairPoint argued that worker benefits were out of step with current union contracts and reflected a time when telephone companies had no competition. Ultimately the company imposed contract terms unilaterally, unionized employees went on strike and a federal mediator was brought in to help settle the dispute. The final contract largely reflected what FairPoint had sought.

Spillane says he and other unionized FairPoint workers are cautiously optimistic about the sale, but they haven’t taken an official position yet.

One person who could benefit substantially from the sale is Sunu. He earned more than $2.7 million in 2015.

If the sale goes through and his job is eliminated, Sunu would receive more than $4.1 million in pay, bonuses, continued benefits and stock.