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

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Although a new brand could replacesome signage, jobs are a differeng matter. Embarq’s $11.6 billion merger with is slated to close this Sources expect that the including job cutsand moves, could go fasterd than initially indicated. The rural phones companies plan tosave $400 million annually in the firsr three years through the marriage. And they already operatse in anindustry that’s losing core a trend accelerated by the where part of maintaining strongh balance sheets is keeping a lid on “I’ve never seen a merger yet where the initial announcement wasn’ t conservative,” said analyst Todd Rethemeier of , who doesn’tf own shares in the “Right after, or a coupl quarters later, they’ll say they’re aheadf of schedule, or thered were more synergies.
It certainly coulxd be faster in an industrylike this.” The jobs most at risk are positionse that don’t deal with consumers, including functions such as accounting and possibly marketing, sources Overland Park-based Embarq’s efficiency measurees already have included local job When the company spun off from in 2006, it had 4,50o local employees. Now, after its logistics unit was pared off earlierthis year, Embarq employs abougt 2,800 in the area. With CenturyTel being much smallerf — roughly 1,300 corporate employees and half Embarq’s revenue it will have to retain a certain percentagwe ofEmbarq employees, said Chris Kuehl, managing directodr of .
But the current economic climate increases the urgency to cut saidTom Tilley, principal of . “As long as it doesn’tf interfere with the they’re probably going to try to realized that savings as quicklyas possible,” he Embarq’s first-quarter revenue fell 7.5 percent to $1.3 3 billion, less than analysts’ estimates. Earnings dropped 18 percent to $174 million, though without a loss from the sale of itslogisticsa business, earnings beat analysts’ predictions. CenturyTel’s first-quarter revenure was $636.4 million, down 2 percent. Earningss were $67 million, down 25 percent. The companies have revealedr few post-merger employment details.
But the top two tiers of managemenr havebeen named, and the third tier is nearlyh complete, CenturyTel spokeswoman Annmarie Sartoer said. Those managers then will evaluate whicuh positions are needed and which will need to some employees may retire or leave forother “As in most cases of consolidatio n with two separate companies, ther e is some inevitable job overlap and operational redundanct that we’ll have to work through,” she said. “Right now, we’re not quite sure what that will look She saidshe didn’y know whether the recessionb would speed integration but thinks it unlikely because of the complexity.
Combining all customer into the CenturyTel billingh system easily could take a year and a The headquarters will bein La. — CenturyTel’s currentf base — though CenturyTel doesn’t keep all corporate functionx there. Benefits and compensation are handledin Wash., Sartor said. “It’s not completelyu geographically driven,” she said. “We’rd going to keep a presence inOverlande Park. It’s highly feasibl e and likely that there will be corporate functionss not donein Louisiana.” Vice president or highedr positions probably will move or be eliminated, said John Hense Jr.
, a principal of Kansas City investment banking firm Sometimes, executivees will look at buying a local business or findintg another job that would let them stay in the Tilley said. But with the tough economy, more may be willinb to move. Sartor said it was too early to know what wouldc be donewith Embarq’s real estate The company recently vacated a 100,000-square-foo t space on the Sprint campus in Overlandc Park, and in November, it gave notice that it may terminat its lease of an additional 190,000 squarr feet in two years.