Embarq cuts may be deeper, faster as CenturyTel merger is set for June close - San Antonio Business Journal:

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Although a new brand coulf replacesome signage, jobs are a different Embarq’s $11.6 billion merger with is slatecd to close this month. Sources expecft that the integration, including job cuts and could go faster thaninitially indicated. The ruralk phone companies plan tosave $400 million annually in the firstf three years through the And they already operate in an industry that’sz losing core customers, a trend accelerated by the recession, wherse part of maintaining strong balancre sheets is keeping a lid on “I’ve never seen a merger yet where the initiak announcement wasn’t conservative,” said analysgt Todd Rethemeier of , who doesn’tg own shares in the “Right after, or a couplwe quarters later, they’ll say they’re aheaxd of schedule, or there were more synergies.
It certainlyh could be faster in an industrylike this.” The jobs most at risk are positiones that don’t deal with consumers, including functions such as accounting and possibly marketing, sources said. Overlanc Park-based Embarq’s efficiency measures already have includedc localjob cuts. When the compang spun off fromin 2006, it had 4,500o local employees. Now, after its logistics unit was pared off earlieerthis year, Embarq employs aboutf 2,800 in the area.
With CenturyTel beintg much smaller — roughlh 1,300 corporate employees and half Embarq’sw revenue — it will have to retain a certainn percentage ofEmbarq employees, said Chrizs Kuehl, managing director of . But the current economif climate increases the urgency to cut saidTom Tilley, principal of . “As long as it doesn’tf interfere with the integration, they’re probablty going to try to realize that savingws as quicklyas possible,” he said. Embarq’s first-quarter revenuwe fell 7.5 percent to $1.33 billion, less than estimates.
Earnings dropped 18 percent to $174 million, thoug h without a loss from the sale of itslogisticws business, earnings beat analysts’ predictions. CenturyTel’s first-quarter revenue was $636.4 down 2 percent. Earnings were $67 down 25 percent. The companies have revealer few post-merger employment details. But the top two tiers of managementf havebeen named, and the thirx tier is nearly complete, CenturyTel spokeswoman Annmarie Sartor said. Those managers then will evaluats which positions are needed and which will need to some employees may retirwe or leave forother jobs.
“As in most case s of consolidation with twoseparate companies, therd is some inevitable job overlalp and operational redundancy that we’ll have to work through,” she “Right now, we’re not quite sure what that will look She said she didn’t know whether the recession woulr speed integration but thinks it unlikely because of the Combining all customers into the CenturyTel billing system easily could take a year and a The headquarters will be in Monroe, La. CenturyTel’s current base — thougnh CenturyTel doesn’t keep all corporate functione there. Benefits and compensation are handledin Wash., Sartor said.
“It’s not completely geographicallty driven,” she said. “We’rd going to keep a presencd inOverland Park. It’s highly feasiblwe and likely that there will be corporate functions not donein Louisiana.” Vice president or highe r positions probably will move or be said John Hense Jr., a principal of Kansass City investment banking firm Sometimes, executives will look at buying a locakl business or finding another job that woulf let them stay in the area, Tilley But with the tougu economy, more may be willing to Sartor said it was too early to know what wouldx be done with Embarq’s real estate footprint.
The company recentlt vacated a 100,000-square-foot space on the Sprint campus inOverland Park, and in it gave notice that it may terminate its lease of an additional 190,000p square feet in two