Seidenberg, Ivan G. 1946–

International Directory of Business Biographies, (2005) by Tim Halpern

A COMPANY MAN TURNS ON THE UNIONS

As Verizon faced increasing competition from cellular phones and cable modem services, the company was also forced to take a closer look at its balance sheet. In spite of the fact that Seidenberg prided himself on having come up through the rank and file of the company, in December 2002 Verizon laid off 2,700 workers in New York and New Jersey, about 10 percent of the company's frontline repair and installation workforce. These cuts were the first major layoffs in New York by Verizon, which at the time had 46,000 employees in the state, including those in its wireless division. Seiden-berg called the cuts unavoidable in a telecommunications industry that had been crippled by an economic slump, saying, "The union leadership is standing at a crossroads. They can hold on to the old industry, and accelerate the flow of jobs and investment away from traditional telecom companies to the newer companies. Or they can join the fight for our mutual survival and help us find a new model that will help us preserve jobs and compete in the marketplace" ( New York Times , July 31, 2003).

SEARCHING FOR SAVINGS

By the end of 2002 the company had lost nearly two million lines to the defection of consumers and businesses to such alternatives as wireless and telephone via cable TV wires. In May 2003 Seidenberg gathered his top managers for an emergency meeting, instructing them to cut costs so that the company could invest in newer businesses and match price cuts by competitors. He gave awards to employees who could find the biggest savings.

MAKING MONEY BY DEALING WITH COMPETITORS

One immediate focus was the company's wholesale business, in which it leased its lines at reduced rates to other companies that wanted to offer local phone service. Baby Bells were once accused of stalling this process—after all, they would rather sell the service themselves—but in a new regulatory arena, they faced fines if they did not meet requirements for fair and speedy access.

EFFICIENCY IS KEY

At Verizon each of the wholesale orders traditionally took about an hour. The orders arrived by fax, and then employees manually entered the details into the company's systems. Next they would send the orders back so that customers could check them for accuracy. That route, which was repeated thousands of times a year, was eliminated. In its place was a more direct process in which Verizon allowed its customers to access its computer directly and place the orders themselves. Said Tom Maguire, who oversaw Verizon's wholesale operations, "It's cheaper to get a machine. Machines don't call in sick and are consistent in quality" ( Wall Street Journal , May 28, 2004). As a result of the change, Verizon was processing more than 92 percent of its orders automatically through proprietary software it had developed. The system was so easy to use that Verizon was able to train several temporary workers, whom they hired because of a threatened strike, to use it in a week and a half. Training the old way took more than a year.