Thirteen Thousand PositionsNarrow moat

Verizon (VZ) — moat facet

Schulman cut over 13,000 positions within six weeks of taking over, taking headcount from 99.6 thousand to 89.9 thousand before Frontier added 7.7 thousand back.

Six weeks after taking over, Dan Schulman cut the payroll. A Form 8-K of 20 November 2025 announced that "The workforce reduction will include the elimination of over 13,000 positions", with over 80% of those affected leaving in December 2025 and severance expected "in the range of $1.6 billion to $1.8 billion"1. It also promised "a significant reduction in outsourced, contracted and other outside labor expense"2.

Verizon employees at period end (thousands)99.6Dec 202489.9Dec 202597.6Jun 2026Verizon Q4 2025 and Q2 2026 results releases; June 2026 includes Frontier
Down a tenth in 2025, then Frontier added people back.

The headcount shows it. Verizon had about 99.6 thousand employees at the end of 2024 and 89.9 thousand at the end of 20253, 9.7% fewer4. The 10-K gives "approximately 89,900 employees on a full-time equivalent basis"5, 89% of them in the United States6. Frontier then brought the count back to 97.6 thousand by June 20267.

The effect on margins was immediate. Consolidated adjusted EBITDA margin reached 40.1% in the June 2026 quarter against 37.1% a year earlier, which the company called "the highest the company ever reported"8. Segment costs are shared, as argued on A Network Shared Between Two Segments, so fewer people help both segments at once.

The severance expected, $1.6 billion to $1.8 billion9, was close to what was booked: $1,715 million for 202510. The June 2026 quarter added another $397 million11 under "continued headcount reduction initiatives" the company flagged in advance12.

Cost cutting is a moat only if rivals cannot copy it, and they can. What Verizon has is scale over which to spread a leaner centre. The test is whether the headcount stays down: if employees excluding Frontier's rise back above 95 thousand by the end of 2027, the cut will have been a year, not a new cost base.

Moat trajectory: Widening

Adjusted EBITDA margin 40.1% in Q2 2026, a record.

The number that tests this moat
Reported
Employees, latest quarter
97.6 thousand (30 June 2026, including Frontier), from 89.9 thousand at end-2025 and 99.6 thousand at end-2024

Whether the leaner base holds once Frontier is folded in; above 100 thousand would undo the cut.

Source: Verizon Q2 2026 results release ↗
⚠ Threats to the moat
⚠ THREAT 01
Severance Three Years Running
Verizon has booked about $4.4 billion of severance since 2023, every year of it excluded from adjusted earnings as a special item.
References
  1. ReportedA Form 8-K of 20 November 2025 announced that "The workforce reduction will include the elimination of over 13,000 positions", with over 80% of those affected leaving in December 2025 and severance expected "in the range of $1.6 billion to $1.8 billion".
    Verizon Form 8-K of 20 November 2025, Item 7.01 - elimination of over 13,000 positions and expected severance of $1.6 billion to $1.8 billion. — November 2025 · publ. 20 November 2025 · source ↗
  2. ReportedIt also promised "a significant reduction in outsourced, contracted and other outside labor expense".
    Verizon Form 8-K of 20 November 2025, Item 7.01 - elimination of over 13,000 positions and expected severance of $1.6 billion to $1.8 billion. — November 2025 · publ. 20 November 2025 · source ↗
  3. ReportedVerizon had about 99.6 thousand employees at the end of 2024 and 89.9 thousand at the end of 2025, 9.7% fewer.
    Verizon fourth-quarter and full-year 2025 results release, Form 8-K exhibit 99 - full-year operating statistics, segment EBITDA, free cash flow 2020-2025 and 2026 guidance - income statement, segment EBITDA and highlights. — FY2025 · publ. 30 January 2026 · source ↗
  4. Moat Explorer calcVerizon had about 99.6 thousand employees at the end of 2024 and 89.9 thousand at the end of 2025, 9.7% fewer.
    Moat Explorer calculation from Verizon's reported figures ($ millions unless stated; calendar years). Revenue and profit over the decade: revenue 2015-2025 (138,191 / 131,620) ^ (1/10) - 1 = about 0.5% a year; 138,191 / 131,620 - 1 = +5.0%; range 138,191 - 125,980 = about 12.2bn; 2027 revenue of 142bn would need (142 / 138.191) ^ (1/2) - 1 = about 1.4% a year; operating income 29,259 / 30,615 - 1 = -4.4%; net income 17,174 / 17,879 - 1 = -3.9%; diluted EPS 4.06 / 4.37 - 1 = -7.1%; total assets 404,258 / 244,175 - 1 = +65.6%. Segments 2025: Consumer share of segment operating income 29,628 / (29,628 + 2,532 = 32,160) = 92.1% (2024 29,484 / 31,542 = 93.5%; 2023 29,011 / 31,077 = 93.4%); Business share 2,532 / 32,160 = 7.9%; Q2 2026 Consumer 8,032 / (8,032 + 991 = 9,023) = 89.0%, Q2 2025 7,643 / (7,643 + 724 = 8,367) = 91.3%; Consumer operating margin 29,628 / 106,807 = 27.7%, Business 2,532 / 29,069 = 8.7%; Business share of segment revenue 29,069 / 135,876 = 21.4%; shared network and service costs 17,991 + 9,717 = 27,708, Business share 9,717 / 27,708 = 35.1%; Consumer share of segment EBITDA 43,801 / (43,801 + 6,644) = 86.8%; Consumer revenue 2025 106,807 / 102,904 - 1 = +3.8%, 2023-2025 106,807 / 101,626 - 1 = +5.1%; Consumer service revenue 80,617 / 77,127 - 1 = +4.5%; Consumer equipment 21,779 - 23,930 = -2,151, about 2.2bn below cost; Business revenue 29,069 / 30,122 - 1 = -3.5%; Enterprise and Public Sector 13,532 / 15,076 - 1 = -10.2%; Business Markets and Other 13,555 / 12,697 - 1 = +6.8%; Wholesale 1,953 / 2,313 - 1 = -15.6%; institutional and wholesale decline (15,076 - 13,532) + (2,313 - 1,953) = 1,904; Q2 2026 Consumer revenue 26,242 / 26,648 - 1 = -1.5%; Business revenue 7,155 / 6,973 - 1 = +2.6%; restatement 7,275 - 6,973 = 302 a quarter; mobility and broadband service revenue 2025 75,923 + 14,940 = 90,863. Customers: T-Mobile postpaid accounts 34,700 - 34,237 = 463 more than Verizon; T-Mobile 34,700 / 31,502 - 1 = +10.2%, 34,700 - 31,502 = 3,198; Verizon accounts 34,237 - 34,646 = -409, -1.2%; ARPA premium 168.35 / 152.91 - 1 = +10.1%; cable lines 10,187 + 12,540 = about 22.7 million; cable Q2 net adds 448 + 406 = 854 thousand, 854 / 184 = 4.6 times; Q2 net adds share 184 / (184 + 432 + 448 + 406 = 1,470) = 12.5%; fibre net adds 155 / 367 = 42%; annual churn at 0.92% a month 0.92 x 12 = 11.0%, about one customer in ten; 0.1 point on 94 million = about 94 thousand phones a month; prepaid churn 3.59 / 0.92 = 3.9 times; prepaid annual loss 1 - (1 - 0.0359) ^ 12 = 35.5%, average life 1 / 0.0359 = 27.9 months, a little over two years; revenue per postpaid line 170.62 / 3.67 = 46.49 (2025), 167.26 / 3.61 = 46.33 (2024); ARPA 2025 170.62 / 167.26 - 1 = +2.0%; ARPA Q2 2026 168.35 / 170.79 - 1 = -1.4%; ARPA H1 2026 167.50 / 170.30 - 1 = -1.6%; wireless service revenue 83,703 / 82,073 - 1 = +2.0%; wireless service share of revenue 83,703 / 138,191 = 60.6%; FWA revenue 2,940 / 2,139 - 1 = +37.4%; FWA revenue share 2,940 / 138,191 = 2.1%; fibre annualised 155 x 4 = 620 thousand; passings 2.0 / 30 = 6.7%; passings to fill 2,000 / 620 = 3.2 times. Spectrum and capital: C-Band 45.5 + 7.5 = 53.0bn; licences share of assets 158,159 / 410,186 = 38.6%; licences over goodwill 158,159 / 30,664 = 5.2 times; licences over equity 158,159 / 105,196 = 1.5 times; wireless service revenue per dollar of licences 83,703 / 157,039 = 0.53; spectrum bought June 2026 1.0 + 3.2 = 4.2bn; capex / revenue 17,011 / 138,191 = 12.3% (2025), 23,087 / 136,835 = 16.9% (2022); capex 17,011 / 23,087 - 1 = -26.3%; capex less depreciation 17,011 - 18,349 = -1,338; ROIC averages 2015-2019 (10.8 + 9.1 + 12.7 + 8.2 + 11.3) / 5 = 10.4%, 2021-2025 (8.7 + 7.3 + 5.0 + 7.0 + 7.1) / 5 = 7.0%; interest expense 6,694 / 5,524 - 1 = +21.2% (2023-2025); Q2 interest 1,985 / 1,639 - 1 = +21.1%; interest / operating income 6,694 / 29,259 = 22.9%. Cost, cash and capital returns: employees 89.9 / 99.6 - 1 = -9.7%; severance 533 + 1,733 + 1,715 + 397 = 4,378, about 4.4bn; adjusted EBITDA margin 49,997 / 138,191 = 36.2% (2025), 48,791 / 134,788 = 36.2% (2024); Q2 2026 operating income 7,179 / 8,172 - 1 = -12.2%; free cash flow Q2 6,426 / 5,167 - 1 = +24.4%; adjusted EPS less diluted EPS 4.71 - 4.06 = 0.65; phones sold below cost 28,976 - 25,470 = 3,506, about 3.5bn; dividends / free cash flow 11,481 / 20,126 = 57.0% (2025), 5,864 / 10,209 = 57.4% (H1 2026); dividends / net income 11,481 / 17,174 = 66.9%; dividends per share 2.735 / 2.230 - 1 = +22.6%, (2.735 / 2.230) ^ (1/10) - 1 = 2.1% a year; dividend cost a quarter 0.7075 x 4,155 = about 2,940; buyback average 3,500 / 72.047 = about $48.58 a share; shares 4,155 / 4,217 - 1 = -1.5%; free cash flow yield 21.53 / 193.94 = 11.1%; cash returned about (11.5 + 4.5) / 193.94 = 8.2% of market value; net unsecured debt 128,682 - 110,053 = 18,629; backlog 55.2 / 58.1 - 1 = -5.0%; backlog months 58.1 / 138.191 x 12 = about 5.0; device receivables 34,004 / 31,308 - 1 = +8.6%, allowance 1,628 / 1,315 - 1 = +23.8%; TracFone 3.5 + 3.0 = 6.5bn plus up to 0.65bn. Valuation: Frontier price / market value 22.3 / 193.94 = 11.5%; market value 193.94 / 253.94 - 1 = -23.6% (against end-2019), 193.94 / 188.06 - 1 = +3.1% (against end-2015); target 51.58 / 46.68 - 1 = +10.5%; year-end market value over net income 188.06 / 17.879 = 10.5 (2015), 217.61 / 13.127 = 16.6 (2016), 215.92 / 30.101 = 7.2 (2017), 232.30 / 15.528 = 15.0 (2018), 253.94 / 19.265 = 13.2 (2019), 243.11 / 17.801 = 13.7 (2020), 215.12 / 22.065 = 9.7 (2021), 165.47 / 21.256 = 7.8 (2022), 158.49 / 11.614 = 13.6 (2023), 168.34 / 17.506 = 9.6 (2024), 171.74 / 17.174 = 10.0 (2025); trailing twelve months to June 2026 revenue 138,191 - 67,989 + 68,693 = 138,895, net income 17,174 - 9,882 + 8,880 = 16,172, 193.94 / 16.172 = 12.0, 193.94 / 138.895 = 1.40 - revenue, profit, costs and growth over time. — 2015-2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Verizon's Forms 10-K and 10-Q, quarterly results releases, the recast segment revenue 8-K, peer results releases (T-Mobile, AT&T, Comcast, Charter) and market data; operands shown in the source line.
  5. ReportedThe 10-K gives "approximately 89,900 employees on a full-time equivalent basis", 89% of them in the United States.
    Verizon Communications Inc. Form 10-K for fiscal 2025 (year ended 31 December 2025) - Item 1 business: services, networks, employees and the Frontier and Starry acquisitions. — FY2025 · publ. 17 February 2026 · source ↗
  6. ReportedThe 10-K gives "approximately 89,900 employees on a full-time equivalent basis", 89% of them in the United States.
    Verizon Communications Inc. Form 10-K for fiscal 2025 (year ended 31 December 2025) - Item 1 business: services, networks, employees and the Frontier and Starry acquisitions. — FY2025 · publ. 17 February 2026 · source ↗
  7. ReportedFrontier then brought the count back to 97.6 thousand by June 2026.
    Verizon second-quarter 2026 results release, Form 8-K exhibit 99 - consolidated and segment results, operating statistics, cash flow, balance sheet and guidance - consolidated results and special items. — Q2 2026 · publ. 24 July 2026 · source ↗
  8. ReportedConsolidated adjusted EBITDA margin reached 40.1% in the June 2026 quarter against 37.1% a year earlier, which the company called "the highest the company ever reported".
    Verizon second-quarter 2026 results release, Form 8-K exhibit 99 - consolidated and segment results, operating statistics, cash flow, balance sheet and guidance - consolidated results and special items. — Q2 2026 · publ. 24 July 2026 · source ↗
  9. ReportedThe severance expected, $1.6 billion to $1.8 billion, was close to what was booked: $1,715 million for 2025.
    Verizon Form 8-K of 20 November 2025, Item 7.01 - elimination of over 13,000 positions and expected severance of $1.6 billion to $1.8 billion. — November 2025 · publ. 20 November 2025 · source ↗
  10. ReportedThe severance expected, $1.6 billion to $1.8 billion, was close to what was booked: $1,715 million for 2025.
    Verizon Communications Inc. Form 10-K for fiscal 2025 (year ended 31 December 2025) - Item 1 business: services, networks, employees and the Frontier and Starry acquisitions. — FY2025 · publ. 17 February 2026 · source ↗
  11. ReportedThe June 2026 quarter added another $397 million under "continued headcount reduction initiatives" the company flagged in advance.
    Verizon second-quarter 2026 results release, Form 8-K exhibit 99 - consolidated and segment results, operating statistics, cash flow, balance sheet and guidance - consolidated results and special items. — Q2 2026 · publ. 24 July 2026 · source ↗
  12. ReportedThe June 2026 quarter added another $397 million under "continued headcount reduction initiatives" the company flagged in advance.
    Verizon Form 8-K of 29 June 2026, Item 7.01 - agreement with BT to combine international wireline businesses in a 50/50 joint venture. — June 2026 · publ. 29 June 2026 · source ↗
Sources
Generated September 29, 2026