Telecom service provider Windstream announced a corporate restructuring last week that will result in the elimination of up to 400 management positions, or about 3% of its workforce. The company, which was formed in 2005 from the merger of Alltel Communications wireline assets and Valor Communications, said the move will help streamline operations and provide greater value for shareholders.
“Windstream has grown rapidly through acquisition, and it is crucial that our management structure be as simple and as responsive to customers as possible as we continue to build this company for long-term success,” said Jeff Gardner, president and CEO of Windstream, in a statement.
Windstream said the job cuts will result in between $30 million and $40 million in annualized savings.
Analysts noted the move was the result of numerous acquisitions Windstream has made over the year, moves that bolstered its bottom line, but also bloated its management structure. Windstream made four acquisitions in 2009 alone, including Iowa Telecommunication Services and NuVox.
“Windstream is a successful and growing company and doing strong business,” explained telecom industry analyst Jeff Kagan. “They will start to cut employees after a string of acquisitions they made over the last few years. Cutting workers after an acquisition is typical so there is no problem from the investment point of view. The problem comes from the employment point of view.”
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