The Middletown Press (Middletown, CT)
Frontier says no new layoffs after bankruptcy — for now
A Frontier Communications executive said Monday there will be no immediate reduction in the size of its Connecticut workforce exiting bankruptcy, if a judge allows it early next year, but made no promises for when Frontier’s union contract comes up for expiration a year from now.
Frontier has its headquarters in Norwalk and a telecommunications hub in New Haven, which it picked up in 2014 via its $ 2 billion acquisition of the historic Southern New England Telephone operations from AT&T. The company currently has about 2,000 employees in Connecticut according to Mark Nielsen, chief legal officer, down from about 3,400 at the time Frontier purchased SNET.
Frontier declared bankruptcy last April, succumbing to more than $ 17 billion in debt it had piled up under former CEO Maggie Wilderotter as it acquired swaths of Verizon Communications territories nationally. Nearly 11 months ago, the company’s board replaced Wilderotter’s successor Dan McCarthy with former Dish Network and executive Bernie Han, who within months put Frontier into chapter 11 bankruptcy protection with the goal of eliminating debt.
Former Verizon Communications executive John Stratton is set to become executive chairman after the company clears bankruptcy, with Frontier having yet to state definitively whether Han will remain CEO.
New York approved Frontier’s bankruptcy emergence plan this month, with the plan still subject to the approval of the Connecticut Public Utilities Regulatory Authority. Frontier’s plan still requires additional approvals from the Federal Communications Commission and multiple states including California and West Virginia. As the case in Connecticut, Frontier owns most of the telephone lines in West Virginia.
Frontier indicated it is not using the bankruptcy process “to impair any ... labor obligations” in its words, with existing benefits and union agreements being left in place if receiving a bankruptcy judge’s final approval. The company has indicated it will evaluate its labor costs as union agreements come up for renewal, with its Connecticut labor contract in place for another year after a short-term extension in October 2019.
“As a general matter, our business needs to constantly look at its workforce and make changes that make the company stronger and more efficient,” Nielsen told PURA commissioners on Monday.
Under its bankruptcy emergence plan, Frontier plans to change its financial reporting to better track results in its individual states under what it terms a “virtual separation” process. Frontier has redacted details of the plan in PURA filings, and executives were vague Monday in response to PURA questions on whether the virtual separation restructuring could be an intermediate step to the actual divestment of territories in specific states.
Frontier sold off operations earlier this year in Washington, Oregon, Idaho and Montana for $ 1.3 billion.
Nielsen indicated key characteristics of its Connecticut business — higher population density and fiber optic cable networks — make it a continued attractive market for Frontier. Frontier has signed up 22,000 Connecticut customers for fiber broadband service today, according to Allison Ellis, senior vice president of regulatory affairs.
PURA commissioners tabled some elements of their questions into a separate hearing not open to public view, in order to address elements of Frontier’s plan the company says contains proprietary information that competitors would want to learn.
“Frontier has not explained what this new business plan means for Connecticut,” said Dave Weidlich Jr., president of the Communications Workers of America. “How much money will the hedge fund want to take out of the business?”