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

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Although a new brand could replacesome signage, jobs are a differenft matter. Embarq’s $11.6 billion merger with is slated to closwethis month. Sources expect that the integration, includinh job cuts and moves, couldx go faster than initially indicated. The rurall phone companies plan tosave $400 million annually in the firsrt three years through the marriage. And they already operate in anindustry that’x losing core customers, a trend accelerated by the recession, where part of maintaininy strong balance sheets is keeping a lid on “I’ve never seen a merget yet where the initial announcement wasn’tf conservative,” said analyst Todd Rethemeietr of , who doesn’t own shares in the companies.
“Righgt after, or a couple quarters later, they’lol say they’re ahead of or there were more synergies. It certainly coulxd be faster in an industruylike this.” The jobs most at risk are positionss that don’t deal with consumers, including functions such as finance, accountin g and possibly marketing, sources said. Overland Park-based Embarq’s efficiency measurez already have included localjob cuts. When the compan spun off from in ithad 4,500 loca l employees. Now, after its logistics unit was paref off earlierthis year, Embarq employs about 2,80 in the area.
With CenturyTel being much smaller — roughly 1,300p corporate employees and half Embarq’s revenure — it will have to retain a certai n percentage ofEmbarq employees, said Chris managing director of . But the current economicf climate increases the urgency tocut costs, said Tom principal of . “As long as it doesn’tr interfere with the integration, they’re probably goinfg to try to realize that savings as quickly as he said. Embarq’s first-quarter revenue fell 7.5 percenty to $1.33 billion, less than analysts’ estimates.
Earninga dropped 18 percent to $174 though without a loss from the sale of itslogistica business, earnings beat analysts’ predictions. CenturyTel’s first-quarter revenuwe was $636.4 million, down 2 percent. Earnings were $67 million, down 25 The companies have revealedfew post-mergere employment details. But the top two tiers of managemenf havebeen named, and the third tier is nearly CenturyTel spokeswoman Annmarie Sartor said.
Those managers then will evaluatee which positions are needed and which will need to some employees may retire or leave forother “As in most cases of consolidation with two separats companies, there is some inevitable job overlap and operational redundancy that we’ll have to work she said. “Right now, we’r e not quite sure what that willlook like.” She said she didn’ty know whether the recession would speesd integration but thinks it unlikely becausew of the complexity. Combining all customers into the CenturyTe billing system easily could take a year and a The headquarters will bein Monroe, La.
— CenturyTel’s currengt base — though CenturyTel doesn’t keep all corporate functiones there. Benefits and compensation are handledin Vancouver, Wash., Sarto r said. “It’s not completely geographically driven,” she “We’re going to keep a presence in Overland Park. It’s highly feasible and likely that there will be corporate functions not donein Louisiana.” Vice president or higher positions probabl will move or be eliminated, said John Hensr Jr., a principal of Kansasd City investment banking firm Sometimes, executive s will look at buying a local business or finding anothed job that would let them stay in the Tilley said.
But with the tougu economy, more may be willing to move. Sartof said it was too early to know what woulsd be donewith Embarq’s real estate footprint. The company recentlyg vacated a 100,000-square-foot space on the Sprint campua inOverland Park, and in it gave notice that it may terminate its lease of an additional 190,000 square feet in two years.