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December 11, 2007
Cincinnati Bell has announced plans to offer early retirement to 230 of its management-level employees and has also warned that layoffs may be coming in the next several years.
The regional phone company said Monday it could save somewhere between $5 million and $9 million per year once the workforce reduction takes effect through the early retirement plan.
The company also said the retirement plan could result in a termination benefits charge of $9 million to $17 million.
The savings estimates are based on acceptance of the early retirement package by 25-45 percent of the employees who are eligible to retire.
The company has about 2,950 employees, but it was unclear Monday how many would be eligible for the retirement plan.
A Bell spokesperson could not be reached for comment.
Cincinnati Bell said its board approved the cost-cutting plan Friday, a day after the company announced that it would spend about $18 million to acquire eGIX, a company that provides voice and data service to business customers in the Midwest. The company said the acquisition would provide the company with "an immediate footprint" in business phone service in small- and mid-sized markets in Indiana and Illinois.
Cincinnati Bell said employees who want to accept the buyout offer must do so before the end of the year.
In a filing with the Securities and Exchange Commission, the company also said it may impose "involuntary workforce reductions" in the next several years. It said the number of involuntary layoffs would hinge on a number of factors, including how many employees accept the early retirement offer.
For the most recent quarter, Cincinnati Bell said its revenue was up about 8 percent to $344 million compared to the same three months of 2006 and per-share earnings were flat at 9 cents for the quarter.
During the second quarter, revenue increased by about 2 percent to $329 million, but per share earnings fell by a penny to eight cents because the company had increased the number of outstanding shares by more the five million.
For the first quarter of the year, profits increased to $22.6 million (8 cents per share) compared to $14 million (5 cents) for the opening quarter of 2006.
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