#opex

What changed over the last month or so? We were at $50! I was optimistic that Dan was turning around our firm post layoff and new strategy. Our net add and cash flow numbers were impressive and further OpEx reductions + stock buy backs + dividends was meant to turbo charge our stock to ~$72. What happened? What changed? Does the street know something that we don't?

If you are wondering if your office will be closing soon let me help you figure that out.

1. Go to workday.
2. Go to your organizations
3. Find organization that list all of the employees who report to your building or office.
4. Write that number down.
5. Figure out the capacity of your building(Google search or gemini)
6. Now do some quick math and divide the employees of that org over buildings capacity and times that by 100.
7. If your number is below 65% capacity, your office is almost certainly closing.

Remeber Q2 starts in a few days and they have a strategic plan to save 5billion on opex spending. Without closing a ton of offices, how else would you think they would get there?

I owe you all an apology. Back when those whispers started flying around about big cuts hitting end of Mar, I told people flat-out there weren't going to be layoffs. I was trying to calm nerves, keep morale from tanking, because I genuinely didn't want to believe it . I was wrong. And I'm sorry for giving anyone false hope or making the shock hurt worse when the news landed.

The Frontier stuff closed in Jan, and yeah, the overlap redundancies are real. Then you have got the whole Opex transformation push and AI rolling in faster than anyone expected, quietly eating away at roles we thought were safe. It's not rumors anymore. it's happening peeps.

To everyone who's been let go already, or who's still waiting for the axe, or watching teammates pack up boxes, I'm gutted for you. This su-ks. Really su-ks. Wishing you nothing but the best moving forward: quick landings, decent severance if you got it, and doors opening somewhere that values what you bring. Seriously, good luck.

Leadership is laser-focused on OPEX cuts, and every signal points to around 15,000 jobs still being on the line. That's the number floating around, the one nobody's refuted, the one we all know is coming for us eventually. Whether it happens next week or next month changes nothing in the end. It's happening. The only things left to figure out is how many rounds, and who's getting cut. Prepare accordingly.

Anyone out there with actual insight on what will happen AFTER the Lift and Shift? My speculation is that the L&S was expedited to March so that the receiving business units will have a chance to see what's under the hood before the OP/BP26 cycles start.

Transition 2009 was a slow and dreadful mess. Reshape did not improve anything. The quietly executed re-orgs of every division over the last 2 years has been really draining: all jobs that can move east have done so, with a lot of great people leaving the company.

I have major re-org fatigue and would like to plan accordingly. However, I'm at a loss for what happens next (besides share buybacks specifically and OPEX reduction generally).

During the earnings call, Dan & company stated that they will reduce OpEx by $5 Billion in 2026 (including the 2025 layoffs).

Let’s say laying off 13,000 employees saves $2 billion a year. Where will the remaining $3 billion come from?

IC Design just got hit with 7%. They threw in a few names from Hyderabad to make it seem like it's global but overwhelming majority is US-based. Officially, these random cuts aren't layoffs but "changing strategies and priorities". I heard similar cuts happened to other teams already in 2025.

Make no mistake, executives have been talking about opex and efficiency every townhall. I am guessing they decided quiet layoffs are better than another big round like late 2023. That's fine, we can counter quiet layoffs with quiet quitting.

Anybody on H1B visa impacted in this round so far? In previous rounds, no visa folks were impacted, at least on the network org. Seems like company is harboring visa holders, Anybody else feel that way? H1B paperwork involves filling costs, lawyer fees etc. which is opex, If the goal is saving opex....

RF Sr Manager here Just had a meeting with my Sr. Director & it looks like most of the folks impacted on my team are H-1B employees, mainly to reduce OPEX costs. That’s really sad. We have some truly great people on the team and they’re top performers. It’s honestly worrying and disappointing.

• Customer loss over 500,000 for the year
• Blame Apple on phone availability hindering sales.
• Cite the RIF as an OPEX cut and indicate there will be more change
• Gloss over the outage and blame it on something rather than take ownership.
• Somehow buying Frontier and laying off more employees will set us up for success.
• Latest JDP network report shows Verizon as #2 or worse in all but 5 regions.
• Word salad around being customer centric, setting the foundation and other nonsense that will be meaningless.

What else can they say? VZ is hurting big time right now. Employees won't even know "the plan" until Feb 5 according to our java drinking cowboy.

Vps reporting to same vp’s. No thinning out. Help me understand how we’re cutting operating costs? Like seriously.
Literally hundreds of directors in sec which is a simple upgrade project su-king millions.
Resilience teams do nothing but peacock.
Half of support should be cut as vendors do the actual work.
This is getting ridiculous. Take some hard actions and let’s run lean in tech to do our part in getting Nike back in line. Jesus Christ already.

The Verizon Split: A ServCo/NetCo Divorce Threatened by an Outsourcing Anchor
Verizon's strategic push to separate its core business into two entities—a customer-facing ServCo and a network-operating NetCo—is a widely publicized move aimed at unlocking significant shareholder value and slashing $10 billion in operating expenses (OpEx). While structurally sound in theory, internal echoes suggest the entire separation plan is at risk of being operational chaos due to a critical pre-existing flaw: the poorly performing $2.1 billion Managed Network Services (MNS) contract with HCLTech (HCL).
This separation is not a fresh start; it is a complex IT and process de-integration effort that is being attempted while a core operational function is under external distress.
(....)

1. Amplified Operational Chaos in the Split
   The HCL underperformance is an anchor dragging down the separation process itself:
   Increased IT Migration Costs: A structural split necessitates the clean de-coupling of legacy IT systems. If HCL manages key operational platforms (e.g., MNS systems) but lacks sufficient documentation or operational control, the process of separating and replicating those systems between the new ServCo and NetCo becomes slower, more complex, and pushes the one-time separation cost (estimated at ∼$1-2 billion) higher.
   A Crippled ServCo: The new ServCo requires a seamless hand-off to HCL for its post-sale support model. If this model is already shaky, ServCo’s initial business processes—built on this flawed assumption—will be unstable. This handicaps the ServCo’s agility and customer experience from its first day of independent operation.
2. Workforce Strategy and the Risk of "Brain Drain"
   For the remaining workforce, the situation is characterized by deep distrust and volatility:
   More Internal Turmoil: Employees facing layoffs or transition will have zero confidence in the quality or stability of the outsourced HCL entity. This increases the risk of the most valuable, experienced employees choosing to quit prematurely rather than participate in the chaotic hand-off, further exacerbating the "brain drain."
   Pressure to Shadow: Verizon leadership faces internal pressure to quietly keep high-value engineers in-house to "shadow" or "fix" HCL's work. This preserves short-term service quality but utterly defeats the separation’s core OpEx reduction goal.
   The successful separation of ServCo and NetCo depends entirely on a stable operational base. If the HCLTech partnership remains an underperforming, fixed-cost liability, it will not only undermine the expected cost savings but also significantly reduce the market valuation of the customer-focused ServCo, jeopardizing the entire value-unlocking thesis of the structural split.
   The company must effectively restructure or contain the HCL relationship before or during the separation, or risk the split becoming an exercise in formalizing operational distress.

The Only Way to Fix Verizon's Valuation: Apollo's Blueprint for Structural Separation

Probably 12000 FTEs will loose their jobs. (this already happened !!!)

The days of the integrated telecom giant are over. The biggest opportunity in the sector today isn't a new product; it's a structural divorce—separating the capital-intensive NetCo (Network) from the asset-light, growth-driven ServCo (Service).

This is no longer a fringe idea; it's the defining transformation trend of the decade, and it’s the most rational path to unlock billions in trapped equity value—especially for a stock like Verizon ($VZ).

The Problem: Blended Multiples Suppress Value
Integrated carriers suffer from a blended market multiple problem. The network's capital drag suppresses returns, while the dynamic service business is undervalued. The result? Chronically low P/E ratios and stagnant shares despite strong cash generation.
The Solution: Apollo’s Reverse LBO ServCo Play
Private Equity firms like Apollo Global Management are experts at complex carve-outs. Their blueprint for a newly-separated ServCo: a Reverse LBO that transforms a utility stock into a premium tech-enabled platform, commanding a 2x multiple expansion.

Phase 1: The Asset-Light Transformation (Years 1-2)
Digital-First Cost Structure: Replacing legacy IT with cloud-native BSS/OSS and using AI to overhaul customer service, driving a 20-30% OpEx reduction.
Pure-Play Aggregation: ServCo pivots entirely to the customer, bundling connectivity with high-margin services (security, streaming, IoT). Result: 5-10% ARPU increase and up to 25% churn reduction.

Deleveraging: Cost savings are rapidly converted into financial firepower to stabilize the balance sheet.

What are your thoughts ?
Light Reading Fierce Network
hashtag#Telecom hashtag#Verizon hashtag#PrivateEquity hashtag#Valuation hashtag#ApolloGlobalManagement hashtag#Strategy hashtag#StructuralSeparation

Add a quarterly reminder on your phone starting Feb 9 (~ VCIP townhall) to ask your leader how opex per boe has changed since Jan 1 2026 and what are we doing about it. We cannot stop asking this ever. Do not let them surprise you in a few years that costs are up another 20%. Hold them accountable.

If you see cost creep around you, just play it cool and write to your VP. They'll like it. Skip middle management. They'll learn.

CEP if you are reading this you need to create an anonymous cost creep hotline.

With any luck, we can avoid the next one. 10% cuts are large, 25% is derilection of duty and utter mismanagement, with consequences only for the rest of us.

Don't just watch it happen to you. The food on your family's table depends on it. Good luck. Add that phone reminder

Is the layoff applicable to full time only or contractors are going to be impacted as well? Can organizations sacrifice contractors to meet the 15~20% target and reduce Opex pressure? My organization is loaded with contractors with only a handful of full time employees.

Ryan “poorly tailored suits” Lance, CEO of ConocoPhilllips, stated

"We probably plateau later this decade," Lance said. "It's going to be slow decline beyond that, because there's a lot of resource."

What’s your technical perspective or intuition on production declines and soaring OPEX now that Ryan is viewed with contempt by field personnel particularly Marathon and Concho Honchos

All products consolidated under CPO office , but the only product growing is the CPO's overhead - marketing, planning biz dev, PR while engineering shrinks

In some orgs, not enough people took the "career transitions" package. Despite record margins and a good business environment, discussions are under way about how to (1) pay for the promotions needed to have a viable career ladder for individual contributors (2) bring in new engineers to the industry without growing the budget (3) bring WDs opex closer to Seagate's (4) pay for depreciation on capital expenditures which are needed

Where does that come from? You can just imagine.

Continuous engineering cuts (yeah opex cuts) . But don't worry, the 'CPO office overhead is still comfortably expanding

To effectively control and reduce operational expenses (OPEX), companies can implement the following strategies:

Conduct Comprehensive Spend Assessments: Analyze spending patterns and cost centers to identify areas for cost reduction.

Utilize Data-Driven Insights: Implement advanced analytics tools to gain actionable insights and benchmarks for cost-saving strategies.

Negotiate Better Terms: Regularly evaluate vendor contracts and negotiate better terms with suppliers to secure volume discounts.

Strengthen Supplier Relationships: Build and maintain strong relationships with key suppliers to enhance collaboration and mutual cost-saving goals.

Develop Category-Specific Strategies: Create tailored strategies for high-impact categories, focusing on cost drivers and market conditions.

Optimize Across Categories: Identify synergies across different categories to leverage buying power and reduce costs on a holistic level.

Implement Procurement Technology: Adopt e-procurement platforms and spend analysis tools to streamline processes and enhance cost control.

By applying these strategies, companies can not only control their OPEX but also drive value and ensure long-term sustainability.

https://www.golimelight.com/blog/opex-planning

Let's turn back the clock a bit. Around ten years ago Dell laid off a lot of long time employees. Employees who had worked for the company for 15 years or more. As you would expect after 15 years, these were very well paid employees across all skill workers.

Dell was still a growing company and could have offered other roles to these employees. However Dell let them go. Needing a wealth of new employees Dell turned to India and the new hires received the kind of lower wages that new employee (performing the same job) would get as opposed to a long time employee.

Now here we are in 2025. Those H1-B hires are now in their tenth year. Through annual raises they are now a bigger hit to OPEX. Now comes Trump's new H1-B policy. So now Dell gets to layoff veteran and costly H1-B and blame it on the new H1-B policy. But now they simply run the same gambit of laying of veteran employees for new lower paid replacement and look innocent free.

It's like in that movie The Sting. Never let your mark know they were stung.