Verizon's New CEO Bats For Aggressive Cost Cuts To Fund Investments In Growth: Retail Agrees

• Verizon CEO Daniel Schulman proposed a growth revamp in a strategic overhaul.
• The company is planning to grow its subscriber base while reducing operational costs.
• Verizon’s third-quarter revenue missed estimates, but earnings exceeded expectations.

Verizon Communications Inc.’s (VZ) newly appointed CEO, Daniel Schulman, said on Wednesday that the company is undergoing a major strategic shift and outlined plans to revamp its growth approach. 

Speaking during the third-quarter (Q3) earnings call on Wednesday, Schulman emphasized that while Verizon has strong infrastructure and capabilities, the company has not fully used these advantages to expand its customer base or market share.

Strategic Reset

Schulman acknowledged that Verizon's recent performance has fallen short of both its potential and investor expectations, noting that stock performance mirrors this reality. 

“Verizon has deep strength and incredible potential, but the blunt truth is we haven't captured the customer growth opportunities this strong foundation enables.”

— Daniel Schulman, CEO, Verizon

 

The CEO pointed out that Verizon's recent growth has leaned heavily on price increases rather than genuine subscriber expansion, a strategy he called unsustainable. 

As the company faces heightened churn and diminishing returns from past price hikes, Schulman stressed that transformative changes are essential to generate stronger shareholder value and ensure long-term profitability.

Operational Overhaul

Schulman stated that Verizon is preparing to retool its operational model to become simpler and leaner. He said the company would invest across marketing, customer experience, and broadband and mobility services while simultaneously cutting costs throughout its business. 

“Verizon will no longer be the hunting ground for competitors looking to gain share. We are reinventing how we operate to make Verizon more agile and efficient,” Schulman added. 

Verizon stock traded over 2% higher on Wednesday morning. On Stocktwits, retail sentiment around the stock improved to ‘extremely bullish’ from ‘bullish’ territory the previous day. Message volume shifted to ‘extremely high’ from ‘high’ levels in 24 hours.

The company’s Q3 revenue of $33.8 billion missed the analysts’ consensus estimate of $34.27 billion, according to Fiscal AI data. However, adjusted earnings per share (EPS) of $1.21 were above the $1.19 estimate. 

Verizon’s stock is down more than 2% in the past 12 months. 

Also See: Etsy Names Kruti Patel Goyal As Next CEO, Stock Slides On Lower Sales Outlook

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