The stock of Verizon Communications Inc (NYSE:VZ) closed at $47.18 losing 0.15% in yesterday’s trading session. On Thursday, the company’s CEO outlined that they had plans underway to cut $10 billion in spending from its operations over the next four years.
Zero-based budgeting is the cost-cutting technique that the carrier intends to deploy towards reaching its set objective. The principle being adopted is one that embraces the thought all business units starting with a clean sheet of paper every year. It seeks to strike out the traditional mechanism that majorly banked on relating matters to the previous year’s spending.
In 2016, the company had about $99 billion in operating expenses and $126 billion in revenue. A spokesman representing Verizon has outlined that the cuts will be coming evenly across the business in great opposition to it coming from one specific area. Sprint Corp (NYSE:S) has in the recent years been employing the zero-based budgeting cost-cutting strategy.
The company, which happens to be the nation’s largest wireless carrier by subscribers, is being compelled to provide unlimited data plans in the face of increasing competition from rivals and to slash the prices as well. The set up measures are drastically hurting the company’s revenues. This provider’s internet business and landline phone will most probably suffer from the cord-cutting.
Lowell McAdam, the company’s CEO while speaking at a Goldman Sachs investor conference on Thursday revealed that he was no longer targeting the acquisition of a cable company. However, one year ago the company had been considering acquiring one.
In January, the Wall Street Journal reported that the provider had been thinking about striking a deal with Charter Communications, Inc (NASDAQ:CHTR).The top official added that Verizon had plans underway to acquire deep fiber assets which would help its 5G buildout. According to him, the company had already moved on. He expressed his great pride in the fact that the company had reached a point where it was building much of its own fiber optic cables.
He opined, “The passage of time has seen us make major progress in business. We remain committed to sharpening our competitive edge.”