Editor’s note: This article was updated at 3:51 p.m. Friday.
The chief executive officer of FairPoint Communications announced Friday the company will close its South Burlington call center as part of a national plan to eliminate 260 jobs at the company.
Paul Sunu wrote in an email to FairPoint employees across 17 states that the company will “restructure” the union and nonunion workforce. The South Burlington call center will close as early as July, affecting 64 workers.
The union coalition Fairness at FairPoint quickly issued a news release condemning the action, saying the 219 union layoffs will affect 10 percent of its northern New England workforce. Officials in Vermont say they are disappointed but ready to assist the workers.
The layoff announcement comes a week after Sunu told shareholders the company must consider a merger or acquisition after losing $42.5 million in the first quarter. It is also three months after the company ratified a union contract following a four-month strike. The company is also in the middle of a service quality investigation before the Vermont Public Service Board.
“This action, combined with other headcount reductions over the past two years, approximates the level of voice line loss the company has experienced in that period,” Sunu wrote in the email.
“We must address the reality of access line and legacy revenue decline, and we are taking these steps to ensure our administrative and operational structures remain aligned with the size and composition of our business,” he said.
Gov. Peter Shumlin said the news was “disheartening” in a statement Friday.
“I’m very disappointed that this national decision is affecting Vermont workers,” Shumlin said. “This is incredibly disheartening news for the affected workers and our focus will be on assisting them and ensuring Vermonters get the service quality they deserve.”
Jim Porter, telecommunications director for the Department of Public Service, and Annie Noonan, commissioner of the Department of Labor, both responded quickly from the perspective of labor and service quality issues.
Noonan said the 64 Vermont employees will qualify for dislocated worker training through the federal government. They will also qualify for unemployment once their severance packages run out. FairPoint says it will give employees severance pay based on the number of years they have been at the company.
“We start our rapid response services as soon as possible,” Noonan said. “They’re very skilled. They’re very long-tenured. They have excellent work ethics. They’ll be very valuable for other employers.”
Porter said the South Burlington call center is the only one in Vermont. FairPoint has two in Maine.
“It’s certainly something we’ll look at within the confines of the service quality investigation,” Porter said.
FairPoint spokeswoman Angelynne Beaudry did not comment. In a press release, officials said the telecommunications company remains “focused on transforming its revenue base to more sustainable, data-centric lines of business as technology and customer preferences evolve.”
“To support this focus, the company plans to expand its staffing and support in areas such as the recently-announced data center in Manchester, New Hampshire, and related lines of business,” company officials said in a statement. “To assist impacted employees in their transition, FairPoint will provide severance based on years-of-service and will offer outplacement and transition assistance services to eligible employees.”
Mike Spillane, business manager for the International Brotherhood of Electrical Workers 2326 in Vermont, criticized the company in a statement for laying off workers who agreed to a new union contract in February that lowers the value of fringe benefits.
“Many of these folks have devoted years to a career with the phone company, and they are proud of it,” Spillane said. “They are valued members of our communities who were willing to make incredible sacrifices during our historic strike. They fought not just for their own jobs, but for the quality service that our customers deserve. They don’t deserve this.”
FairPoint wrote in Public Service Board testimony in April that the company has lost 45 percent of its Vermont landline customers since buying the network from Verizon in 2007.
In Maine, where there are still two call centers, the Legislature has been considering bills that would loosen regulations on FairPoint. One bill would eliminate the company’s need to provide phone service to Maine customers with no other option, and an amendment to another bill would remove Maine regulators’ ability to enforce service quality standards on the company.
FairPoint is worth about $500 million based on its market capitalization, pays no dividends to its shareholders, and is owned largely by mutual funds. Its stock price was up 4 cents at 18.40 a share just before closing Friday.
The company is based in North Carolina and has about 3,000 employees across 17 states.
