FairPoint Communications plans to lay off roughly 260 workers in 17 states in a restructuring effort that will include the closure of a call center in South Burlington, Vermont, the company said Friday.

The bulk of the layoffs will come in FairPoint’s northern New England operations, where 219 people, or more than 10 percent of its workforce in the region, will those their jobs, according to a news release from two unions representing workers. The unions said as many as 120 workers could be laid off in Maine.

Members of both the International Brotherhood of Electrical Workers and the Communications Workers of America in Maine, New Hampshire and Vermont will be affected, they said.

A FairPoint spokeswoman said via email that the company has not yet determined how many jobs will be eliminated in each state.

“I don’t know where/how they got their number,” spokeswoman Angelynne Beaudry said of the unions. “We don’t have a breakdown by the 17 states yet since the unions have a process that will impact final counts by state. That process will play out over the next several weeks.”

VERMONT CLOSURE AT ISSUE

IBEW and CWA leaders agreed that the final numbers could change during negotiations, which are scheduled to begin Monday. Still, they said FairPoint has given them a detailed breakdown of which positions will be cut.

Peter McLaughlin, business manager of IBEW Local 2327 in Maine, said about 70 IBEW jobs are due to be cut in Maine. Don Trementozzi, president of CWA Local 1400, said 48 CWA jobs are scheduled to be cut, based on reverse seniority, in Maine, New Hampshire and Vermont.

However, he noted than an additional 51 union members work at the South Burlington call center targeted for closure, and that it is unlikely those workers would be willing or able to travel long distances to take other positions at FairPoint.

Trementozzi said the CWA will fight the call center closure because it would violate a contract provision that calls for roughly 50 non-union members doing call center work for FairPoint in Alabama to be dismissed before any union members.

Union leaders were surprised and disappointed by the news of cuts, which they said will further erode service quality for the region’s telecommunications customers.

“FairPoint has failed to meet service quality benchmarks for years, and cutting its skilled workforce by more than 10 percent will only make matters worse,” McLaughlin said in the release. “We are disgusted by this company’s total disregard for its employees and customers.”

FairPoint said the layoffs are necessary to keep costs in line with the company’s shrinking revenue from landline telephone service. Like many telecommunications companies, FairPoint is mandated to provide land-based phone service throughout states such as Maine, where it is considered a “provider of last resort.” The company has been lobbying the Maine Legislature to be released from that mandate, but has been unsuccessful so far.

SUBSIDY REQUESTED

In 2014, FairPoint asked the Maine Public Utilities Commission for a $67 million subsidy from the Maine Universal Service Fund, which subsidizes rural telephone service. While several incumbent carriers with smaller territories receive subsidies from the fund, FairPoint does not.

It said the subsidy was necessary to keep the company solvent, but the matter was referred to the Legislature with a recommendation from the PUC that FairPoint was not entitled to the subsidy.

“Access lines and legacy revenues are in … decline, and we are taking these steps to ensure our administrative and operational structures remain aligned with the current size and composition of our business,” company CEO Paul Sunu said in a written statement Friday. “Faced with the realities of the industry and the competitive landscape in which we operate, we must be keenly focused on managing costs and enhancing productivity. These steps, while difficult, help solidify our future.”

FairPoint reported losses for the fourth quarter and all of 2014, citing a lengthy strike and “extraordinarily bad weather” as primary reasons for the poor performance.

The North Carolina-based company, which operates the largest landline telephone network in northern New England, said it lost $43.6 million in the final three months of 2014, compared with net income of $6.1 million during the same quarter in 2013. FairPoint said its annual loss widened from $93.5 million in 2013 to $136.3 million in 2014.

The company said the loss was largely because of lower revenue, higher operating expenses and a lower income tax benefit. It also said it spent roughly $51 million on legal expenses in the fourth quarter for work connected to the strike.

MEETING IMMEDIATELY

Unions representing about 1,700 workers in Maine, New Hampshire and Vermont went on strike against the company in October, citing concerns about FairPoint slashing employee benefits and shifting its business model to rely more on independent contractors. The strike was settled in February and employees returned to work Feb. 25.

“Our hearts go out to the hard-working men and women who will lose their jobs because of FairPoint’s mismanagement and greed,” Mike Spillane, business manager of IBEW Local 2326 in Vermont, said in Friday’s release. “Many of these folks have devoted years to a career with the phone company and they are proud of it. 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.”

Union leaders assured members that they would meet with the company immediately to ensure that the layoff process is implemented according to the unions’ collective bargaining agreements.

“We will continue to fight these cuts and support our members and their families through this difficult time,” Glenn Brackett, business manager of IBEW Local 2320 in New Hampshire, said in the release.

Sunu said Friday that FairPoint remains committed to providing great service to its business and residential customers, and that it will improve processes to increase productivity so it can provide the same products and services despite the downsizing.

FairPoint customer complaint calls to the PUC in Maine have dropped off significantly since the strike ended, said Derek Davidson, Consumer Assistance and Safety Division director. The division received 58 complaint calls in January and 42 in February, the final month of the strike, Davidson said. It received only five complaints in March and three in April, he said.

J. Craig Anderson can be contacted at 207-791-6390 or:

[email protected]

Twitter: jcraiganderson


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