GTE Telephone Operations announces nationwide job reduction of 4,700 in continued effort to increase value for customers and shareholders

IRVING, Texas -- GTE Telephone Operations today announced that its ongoing efforts to become more competitive will result in a reduction of 4,700 jobs by the end of this year. This reduction is a continuation of a three-year plan to streamline operations and reduce costs that was announced in January 1994 and called for the reduction of 17,000 jobs.

The majority of affected employees will begin receiving notices tomorrow (Oct. 17) .

The direct impact on employees will be partially offset by a voluntary separation program offered recently to specific job classifications among bargaining unit employees. The company projects that about 620 employees will accept the offer. The need for involuntary separations has been further diminished by attrition and the reduction of 700 temporary contract positions.

Marketplace Raising the Bar

"We are taking this necessary action as part of a planned effort to improve GTE's competitive position," Telephone Operations President Thomas W. White said.

"The marketplace is continually raising the bar," White said. "As competition becomes more of a factor, we are competing for both customers and investors. To achieve that balance, we must continually drive new revenues up and operating costs down. That will enable us to offer customers competitive prices and service, and stockholders attractive growth."

Consolidations and New Systems to Save $1 Billion Annually

GTE has undertaken an extensive overhaul of its processes throughout the company, adapting new systems and network technologies to improve efficiencies and effectiveness of its customer service. By reducing duplication of efforts and automating certain functions, the company expects to realize annual cost savings of $1 billion through a three-year process re-engineering initiative that began in January 1994.

At that time, GTE said its plan was to cut 17,000 positions in the workforce. By year-end 1995, about 12,000 of those positions will have been eliminated.

"In spite of these reductions, we are seeing new jobs spring up as a result of new ventures such as video services, and because of increasing market demand for re-engineered capabilities such as billing and operator services," White said.

GTE, Unions Collaborate to Provide Employment Transition

A 1994 initiative by GTE and leaders of the Communications Workers of America and the International Brotherhood of Electrical Workers resulted in a successful effort to obtain funds from the Department of Labor for programs for dislocated workers. This Employment Transition Program will be available across all GTE Telephone Operations locations by the end of this year. The program is facilitated through the federal Job Training Partnership Act administrative office in each area.

Separation Benefits

In addition to re-training, other benefits to hourly employees affected by the current reduction include separation pay and opportunities for continuing medical coverage, terms of which differ according to separate union contracts in each state.

Departing management employees will receive outplacement assistance in addition to their severance benefits.

The cost of the separation benefits for employees was included in the one-time $1.8 billion charge taken against fourth quarter 1993 earnings to cover the cost for implementing re-engineering plans.

GTE Telephone Operations is the largest U.S.-based local telephone company, providing voice, data, and video products and services through more than 23 million access lines in portions of the United States, Canada, South America, the Caribbean and the Pacific. Based in Irving, Texas, the company had total revenues of $15.7 billion in 1994, and currently employs 68,000. Its parent organization, GTE Corp., is the fourth-largest publicly owned telecommunications company in the world.