Verizon Extends Voluntary Severance Offer to U.S. Employees Affected by Infosys Outsourcing Deal -- Update

By Sarah Krouse

Verizon Communications Inc. on Thursday changed the exit package offered to about 1,000 of its U.S. workers who were set to move to outsourcing giant Infosys Ltd.

After telling those information-technology workers in late September that they weren't eligible for severance, the wireless carrier is now giving them the option of taking the exit package or moving to Infosys with a guarantee of comparable pay and benefits for two years.

A spokesman for Verizon said the offer reflected the carrier's final agreement with Infosys. Verizon, the largest U.S. wireless carrier by subscribers, recently signed a $700 million information-technology outsourcing agreement with the Indian company.

About a dozen employees affected by the move to Infosys said they were initially surprised and disappointed that they were being transferred to a new company, rather than being offered the same severance packages many of their colleagues received.

Their frustrations stemmed in part from the timing of the outsourcing agreement and a separate voluntary separation package offered to more than 44,000 management employees.

On a late September morning, Verizon told about 2,500 information technology workers globally that they would be transferred or "rebadged" to Infosys.

Hours later, Verizon offered a severance package that was one of its most generous in years to a large group of their colleagues. The package offered recipients three weeks of pay for every year served at the company, up to 60 weeks.

Initially, the IT workers set to transfer to Infosys were told that they weren't eligible for severance, according to materials distributed to workers and reviewed by The Wall Street Journal. They could accept the new job offer with a guarantee of similarly valued benefits for one year or refuse and forfeit access to their 2018 bonus and a special share award granted after this year's tax overhaul.

The IT staff being transferred to Infosys work in Verizon offices across the country, including in Texas, Virginia, Georgia and New Jersey. Projects they work on span applications used in call centers, supply-chain-system support, data management and network-security support.

Some staff members who attended an Infosys town hall meeting in an Irving, Texas, auditorium in recent weeks cried, according to two people who attended the meeting.

Many employees affected by the deal consulted with Sara Blackwell, an attorney at The Blackwell Firm, a Sarasota, Fla.-based firm that focuses on employment law. Ms. Blackwell was exploring a potential class-action lawsuit.

One employee conducted a financial analysis of what the difference between Infosys and Verizon employee benefits would amount to for a worker making $125,000 a year over 20 years. The analysis was sent to executives including Chief Executive Hans Vestberg and Chairman Lowell McAdam.

Verizon and Infosys executives had sought to assuage concerns.

"Our largest commitment to Verizon: Providing you a long, fulfilling career," a presentation delivered to employees during town hall meetings with Verizon and Infosys executives read. An email from a top executive told affected workers that the company thought they were "the most knowledgeable talent to transition."

Now, employees have until Oct. 29 to consider the final offer from Infosys, which will come with a "joining bonus." If workers don't accept a role there, they can continue to work at Verizon until a negotiated end date and are eligible for the severance package.

"We appreciate and respect the concerns you have raised regarding the transition to Infosys," Verizon executives wrote to affected staff in a memo Thursday reviewed by the Journal.

"Everyone's really happy. They're happy that it's fair," said Kathlyne Le, 44, who has worked at the carrier for 13 years.

Verizon faces intense competition as the market for cellphones passes the point of saturation. Wireless-network providers are seeking revenue from new devices, media content and businesses using wireless technology in factories, farms and cities.

Verizon is betting heavily on faster 5G networks for its future growth, a path that will require heavy infrastructure investments. Mr. Vestberg, who succeeded Lowell McAdam in August, is in the throes of an effort to cut $10 billion over four years to free up resources for that investment.

The outsourcing agreement and severance packages are part of that initiative.

Write to Sarah Krouse at sarah.krouse@wsj.com

(END) Dow Jones Newswires

October 11, 2018 19:13 ET (23:13 GMT)

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