A Windstream Holdings spokesperson said Thursday (Jan. 18) that the company, which fought off a bid by a New York vulture fund in November to push the Little Rock telecom into bankruptcy, is undergoing a workforce reduction that will cut nearly 54 jobs locally and an unknown number of workers in others areas across the U.S.
Windstream spokesman David Avery said 54 positions are being eliminated in Arkansas in various workgroups, including 43 positions in Little Rock. He would not divulge the total number of job cuts across the company outside of Arkansas. The company had 1,275 employees in Arkansas and about 13,000 nationwide at the end of the year, he said.
“We are only providing the local impact and not disclosing the overall number of positions affected or estimated savings from the reductions,” he said. “Decisions that affect our people are difficult. We appreciate the contributions of those whose positions are affected and will provide severance benefits.”
Avery said the workforce changes will improve Windstream’s overall cost structure and enable continued investment across the company’s 150,000-mile network, which provides bundled services such as broadband, security solutions, voice and digital TV to consumers in rural areas across half of the U.S. The company also provides data, cloud solutions, unified communications and managed services to small business and enterprise clients.
“As we position the company for growth, we must ensure that we have the optimal organizational structure in place while making our processes more efficient, reducing redundant systems and delivering robust technology solutions, including SD-WAN and unified communications, to customers,” Avery said.
Windstream has struggled to regain its financial footing since the last restructuring round in 2014 when the company laid off more than 750 people, including 400 jobs in February and another 350 workers in August of that same year.
The initial round of layoffs in 2014 included 67 positions in Arkansas and 36 at its Little Rock headquarters and facilities in West Little Rock, which saved the company nearly $20 million annually in severance expenses. The latter job cuts in 2014 included 38 local positions and another 120 workers who voluntary retired, requiring the company to book a $7.5 million charge on its balance sheet.
Those jobs in 2014 were not only limited to frontline workers. Former company COO Brent Whittington resigned in August of that year. Former Windstream CEO Jeff Gardner abruptly resigned in December 2014 and the company’s board tabbed former CFO Tony Thomas to lead the rural broadband provider.
After a bruising 2014, Thomas’ first effort to turn around the company’s fortunes as CEO came on April 2015 with the spin-off of the company’s physical telecom and wireline assets into a publicly-held, real estate investment trust (REIT) valued at $8 billion. Under that deal, Windstream spun off its fiber and copper networks and other real estate assets into a publicly-held trust called Communications Sales & Leasing, or CS&L. In turn, CS&L agreed to lease the use of the assets back to Windstream through a long-term deal with an initial estimated rent payment of $650 million per year.
That same deal allowed Windstream to continue to operate and maintain the assets and deliver its broadband and fiber optic services to consumers and businesses under CS&L ownership with no apparent change to customers’ rates or terms of service. The Little Rock telecom also continued to have sole responsibility for meeting its existing regulatory obligations following the creation of the REIT.
After the deal closed, Windstream said it planned to use nearly $3.5 billion in proceeds from the deal to pay off mounting debt, invest in new strategic initiatives, and better position the company for long-term growth.
Nearly a year later, Windstream sold off half of its remaining 20% stake in CS&L in a complex deal to transfer nearly 14.7 million shares of CS&L’s common stock to its creditors in a debt-for-equity exchange. Citigroup Global Markets then acquired those shares from the creditors and as selling shareholder, sold them to institutional accredited investors, including funds managed by Searchlight Capital Partners L.P.
Windstream, which received $309 million from that deal to retire a revolving credit line and other corporate expenses, said the CS&L shares that were sold off represented nearly 50% of Windstream’s total retained stake in the real estate trust after the spin-off in 2015.
Left with its awkward name, CS&L has spent most of its three-year existence as a public company focusing on expanding and diversifying its assets and looking for ways to lessen its dependence on Windstream rental receipts.
In February 2017, after completing a deal to purchase Hammond, La.-based Uniti Group for $170 million in cash and equity, CS&L changed its corporate name to “Uniti Group” and began trading under the new stock symbol UNIT on the Nasdaq Stock Exchange.
Separately, CS&L entered into two separate transactions in October 2016 and February 2017 to reprice $2.1 billion of term loans outstanding under its revolving credit agreement. Under each transaction, the interest rate was lowered 50 basis points to help pay off $4.6 billion of liabilities still on the book, largely related to its spin-off from Windstream in April 2015.