Verizon's voluntary separation offers irk its 3,000-odd employees

Global telecommunications major Verizon’s voluntary separation offers, following a deal to outsource office works to Infosys, have angered its 3,000-odd employees working in the information technology (IT) division.

According to multiple sources, Verizon’s offers to the employees who will be affected by the $700-million contract include an option for them to join Infosys by the end of 2018. An employee can opt for a severance package that offers three weeks of pay for completion of every one year on service with the company, or can join Infosys with an assured salary payment for a period of one year.

In response to a query, Verizon has confirmed the wireless carrier has given the employee an option to rebadge as Infosys employee for a short-term, which it expects to be completed by the end of this year. “We have recently reached an agreement to transition select functions within Verizon’s global IT organisation to Infosys,” a spokesperson of Verizon said in an email reply. 

“All impacted employees will receive competitive offers, and are expected to transition to Infosys in the fourth quarter 2018 to continue performing functions that will now be IT Managed Services for Verizon,” he added. Emails sent to Infosys remained unanswered till the time of going to press. 

But, the offer has brewed discontent among Verizon employees who have vented their anger on social media. Some of the postings blamed Chief Information Officer Shankar Arumugavelu, and new Chief Executive Officer Hans Vestberg for forcibly sending the employees to Infosys.

“Shankar's email mentioned that Infosys will provide credit for employee’s Verizon service year. This is not true. Infosys confirmed in a town hall meeting (that) there is no severance year package in Infosys. So after one year, rebadged employees get nothing if being laid off,” one posting said. In another posting, the move has been dubbed a tax-saving initiative.

The move comes at a time when the biggest player of the US wireless market, Verizon, is trying to slash expenses and save $10 billion in costs by 2020. The firm had about 153,000 employees at the end of June quarter.

Rebadging has been one of the constant features for most big IT services firms, which they do to execute big contracts. For instance, TCS is rebadging around 2,200 employees of Transamerica Life Insurance as part of the $2-billion contract it signed to transform the administration of company’s US insurance and annuity business lines. Similarly, the firm has announced it would rebadge around 1,800 employees of Prudential as part of $690-million contract. Cognizant has also rebadged around 150 employees of European banking group Dexia.  “One significant change that has happened is that most rebadging are undertaken for onsite employees, which provide IT firms to deploy them in other projects in those geographies,” said Pareekh Jain, country managing director at HfS Research. 

He said clear career path along with cultural integration would be critical for the success of any rebadging exercise.