Hans Verstberg led US operator for more than seven years but is replaced with immediate effect by PayPal’s former CEO; Telefónica’s plan reportedly includes up to 7% of workforce
Verizon has surprised the market, announcing the replaced its CEO of more than seven years, Hans Verstberg, with immediate effect. Market consensus seems to be that Verstberg lacked vision for growth. Interestingly, as MarketWatch pointed out, when his replacement, Dan Schulman (pictured), was announced, Verizon’s shares fell 5% in Monday’s trading, while AT&T Inc. shares lost more than 4% and T-Mobile US.’s stock dropped 2%.
Schulman has been a board member at Verizon since 2018 and is its “lead independent director”. He is best known as the former CEO of PayPal Holdings: during his time at the helm, PayPal’s, global annual revenues rose from $8 billion to $30 billion. Schulman has also previously held senior positions at AT&T and Virgin Mobile US.
Vestberg is to serve as special advisor for the next 12 months to ensure a “smooth transition” and help oversee Verizon’s $20 billion acquisition of fibre broadbandco Frontier Communications. The transaction is expected to complete in the first quarter of next year.
New broom, new chair
Mark Bertolini has succeeded Vestberg as chair of Verizon’s board. He said in a press statement, “The board is thrilled to have Dan as Verizon’s next CEO and embark on a new chapter of growth and sector leadership.
“Dan is a seasoned and decisive leader with a unique set of experiences and a proven record of transformative leadership and operational excellence. He is the right leader to chart Verizon’s next phase of increased customer focus and financial growth.”
Bertolini also said, “Hans Vestberg has been an extraordinary leader for Verizon, leading a new era of network investment and creating an innovative culture. Our company is better for his passion and vision. Having created a network that is unmatched and with the upcoming close of the Frontier transaction, the board and Hans discussed that now is the right time for a CEO transition.”
Shulman stated, “I believe in Verizon and its future, and I am honoured to be chosen to serve as CEO. Verizon is at a critical juncture. We have a clear opportunity to redefine our trajectory, by growing our market share across all segments of the market, while delivering meaningful growth in our key financial metrics. We are going to maximise our value propositions, reduce our cost to serve and optimise our capital allocation to delight our customers, and deliver sustainable long-term growth for our shareholders.”
Telefonica’s ‘new’ leader to unveil new strategy next month
Telefonica kicked off what has turned out to be a tumultuous year in telecoms by abruptly replacing its long-term Group CEO amd chair, Jose Maria Alvarez-Pallete, in January. Alvarez-Pallete was forced to resign and succeeded by Indra’s outgoing President, Marc Murtra.
Some saw this as a boardroom coup by the state although the company is listed on the stock market, the Spanish state became its largest shareholder in apparent response to Saudi Arabia’s state-backed operator, stc, acquiring a 10% stake in 2023. Murta has strong links to Spain’s public sector. Indra is a Spanish information technology and defence company.
Now Murtra is reportedly preparing to shed up to 7,000 staff – 6-7% of the telco’s entire workforce – according to the website finimize. He is to unveil a new strategy for the company on 4 November, as he outlined in April at the firm’s annual general meeting.
According to finimize, “most potential cuts [will target] Spanish operations – across mobile, broadband, and IT services – and possibly [reach] Telefonica’s central headquarters for the first time. Any job actions would start after talks with unions, with the company aiming to finalize a deal before December 31 so related costs can be booked in next year’s financials.”
Although lack of growth per se was not the reason for Alvarez-Pallete’s downfall, the pressure is on Murta to come up with some new ways of generating revenue as well as slashing costs.
