Sep 9, 2011 10:27 AM,

FairPoint to slash 400 jobs, about 10% of workforce

By Rich Karpinski

Cost-cutting measure to impact 100 management, 300 union jobs, company says, as bumpy path following Verizon acquisitions continue

FairPoint’s bumpy road just got a little rougher as the carrier announced Thursday it plans to cut 400 jobs in the coming months.

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FairPoint filed for bankruptcy in October 2009 (CP: FairPoint initiates voluntary Chapter 11 proceeding) with about $2.8 billion in debt, much of taken on during the independent telco’s 2008 acquisition of former Verizon Communications landline properties in New England. That acquisition went anything but smoothly as the network cutover was botched and customer satisfaction eroded (CP: FairPoint struggles with post-Verizon backlog).

Just as challenging, of course, is ongoing landline erosion impacting all telcos – though recently FairPoint has been making progress in driving broadband services deeper into its territories (CP: FairPoint expands broadband in New Hampshire).

FairPoint said the 400 job cuts will include 100 management positions, which will be announced later this month. An additional 300 union employees will be affected and the company said it will follow “prescribed steps” in its collective bargaining agreement to manage that process. Severance packages will total between $7 million and $13 million, the company said.

FairPoint said it will save about $34 million in annualized operating expenses with the cuts, with the full benefit realized next year.

FairPoint provides service in 18 states but is largely focused on its New England home region. Job cuts will come mostly from that area as well, including about 130 jobs in Maine, 190 in New Hampshire and 55 in Vermont.