Armed With Tax Cuts, Verizon is Cutting Over 10,000 Jobs

Written by SK Ashby

Verizon announced this morning that over 10,000 employees have accepted buyout offers as part of the company's plans to restructure and, while I wouldn't ordinarily take time to single out one company for this, Verizon and other telecommunications giants have something in common that warrants more scrutiny.

From CBS News:

Verizon Communications on Monday said 10,400 employees are taking a voluntary buyout, the latest example of corporate downsizing as big companies shift from old lines of business to new opportunities while the economy is still strong. [...]

Verizon's culling of its labor force comes shortly after General Motors said it would lay off tens of thousands of workers in a shift to making more SUVs and fewer sedans.

Some observers say the job cuts at GM, Verizon and other big companies is an early warning of a possible economic slowdown ahead, with one tally predicting U.S. companies will cut nearly 495,000 jobs this year.

I don't know if this is necessarily a sign that an economic downturn is coming, but one thing we can say for certain is that Verizon and other telecommunications giants benefited from the Republican party's tax cuts more than any other industry.

Telecommunications companies benefited the most from the GOP's $1.5 trillion tax cut because they were among the highest taxed companies. Unlike other industries that already paid little to no taxes (because they benefit from other tax breaks), the telecom industry saw its effective tax rates drop from over 30 percent to 20 percent in many cases. But not all telecom companies benefited to the same degree. Verizon benefited from the tax cut far more than Sprint, for example, because of the nature of their holdings.

You may recall that shortly after Republicans passed their tax cuts, Verizon handed out bonuses to thousands of workers and attributed it to the tax cuts, but we later learned that the company had been in negotiations to hand out bonuses long before the tax cuts were passed.

One year later, the biggest recipients of the GOP's tax cuts are cutting more jobs than anyone else.

It's possible -- maybe even likely -- that this would be happening right now even if Republicans had not cut taxes for corporations. That's all the more reason why the tax cuts shouldn't have been passed. It was a needless giveaway to wealthy shareholders.