Embarq cuts may be deeper, faster as CenturyTel merger is set for June close - Pacific Business News (Honolulu):

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Although a new brande could replacesome signage, jobs are a different matter. Embarq’sd $11.6 billion merger with is slateds to closethis month. Sources expect that the including job cutsand moves, coule go faster than initially indicated. The ruralk phone companies plan tosave $400 millionh annually in the first three years through the And they already operate in an industry that’as losing core customers, a trendd accelerated by the recession, where part of maintaining strong balancd sheets is keeping a lid on “I’ve never seen a merger yet wheree the initial announcement wasn’t conservative,” said analysyt Todd Rethemeier of , who doesn’ty own shares in the companies.
“Right after, or a couplew quarters later, they’ll say they’rs ahead of schedule, or there were more It certainly could be faster in an industrtylike this.” The jobs most at risk are positions that don’yt deal with consumers, includinb functions such as finance, accounting and possiblyy marketing, sources said. Overland Park-based Embarq’s efficiency measurese already have included localpjob cuts. When the company spun off from in ithad 4,500 local employees.
Now, aftet its logistics unit was pared off earlierethis year, Embarq employs about 2,800 in the With CenturyTel being much smallere — roughly 1,300 corporate employeeds and half Embarq’s revenue — it will have to retaij a certain percentage of Embarq employees, said Chris Kuehl, managing director of . But the current economicv climate increases the urgench tocut costs, said Tom principal of . “As long as it doesn’rt interfere with the they’re probably going to try to realize that savings as quicklyas possible,” he said. Embarq’sa first-quarter revenue fell 7.5 percen t to $1.
33 billion, less than analysts’ Earnings dropped 18 percent to $174 million, thougg without a loss from the sale of itslogistic business, earnings beat analysts’ predictions. CenturyTel’s first-quartee revenue was $636.4 million, down 2 Earnings were $67 million, down 25 The companies have revealedfew post-mergef employment details. But the top two tiers of managemenr havebeen named, and the third tier is nearly CenturyTel spokeswoman Annmarie Sartor Those managers then will evaluatd which positions are needed and which will need to some employees may retire or leave for otheer jobs.
“As in most cases of consolidatiob with twoseparate companies, therde is some inevitable job overlapp and operational redundancy that we’ll have to work she said. “Right now, we’re not quitre sure what that willlook like.” She said she didn’f know whether the recession would spees integration but thinks it unlikelyh because of the complexity. Combininbg all customers into the CenturyTel billiny system easily could take a year and a The headquarters will bein La. — CenturyTel’s current base — though CenturyTel doesn’r keep all corporate functions Benefits and compensation are handledin Vancouver, Wash.
, Sartor “It’s not completely geographically driven,” she said. “We’res going to keep a presence inOverland It’s highly feasible and likely that there will be corporatre functions not done in Louisiana.” Vice presidentt or higher positions probably will move or be eliminated, said John Henser Jr., a principal of Kansas City investmenty banking firm Sometimes, executivess will look at buying a localo business or finding another job that would let them stay in the Tilley said. But with the tough more may be willingto move. Sartord said it was too early to know what wouldx be donewith Embarq’s real estatew footprint.
The company recently vacated a 100,000-square-foot space on the Sprintt campus inOverland Park, and in November, it gave noticw that it may terminate its lease of an additional 190,00p0 square feet in two years.