Struggling FairPoint to lay off 400 workers, including 130 in Maine

Posted Sept. 08, 2011, at 5:33 p.m.

PORTLAND, Maine — Telecommunications company FairPoint Communications is cutting 400 jobs, or about 10 percent of its work force, as it continues to struggle financially after emerging from bankruptcy.

Company officials notified employees Thursday that about 130 people will lose their jobs in Maine, 190 in New Hampshire and 55 in Vermont in the coming months. Another 25 jobs are being cut in the other 15 states where FairPoint operates.

“We’re matching our work force to our workload,” said FairPoint Maine President Mike Reed. “We’re under pretty heavy competition and everyone knows we’ve lost some access lines.”

FairPoint is based in Charlotte, N.C., and provides telephone and high-speed Internet services in 18 states, with nearly 1.4 million access lines.

The company filed for bankruptcy in the fall of 2009, 18 months after buying Verizon’s northern New England land-line telephone and Internet operations for $2.3 billion. It has continued to struggle since emerging from bankruptcy in January.

In its last earnings report, FairPoint reported losing $27.1 million for the April-June period while seeing the number of its access lines decline 6.4 percent from a year ago. Its stock price has fallen from more than $24 a share after emerging from bankruptcy to about $6, where it was trading Thursday afternoon.

The jobs being cut include about 100 management positions and 300 union-represented jobs. All eligible employees will receive severance packages expected to total between $7 and $13 million.

The smaller work force will result in annual savings of about $34 million, FairPoint said.

The job cuts show the company still hasn’t worked out its problems, said Peter McLaughlin, chairman of the International Brotherhood of Electrical Workers council overseeing locals in Maine, New Hampshire and Vermont.

“We just barely have the people now to get done what we have to do and now they’re going to cut another 400 heads,” McLaughlin said. “Our residential customers, our business customers and our wholesale customers are going to suffer. And that’s going to drive the company into the ground even further.”

All the union layoffs involve IBEW members. FairPoint workers in the Communications Workers of America union, who work at FairPoint’s call centers, have a separate contract and are not affected by the job cuts, Reed said.

While FairPoint continues to lose money, Reed said the company is meeting its goals for customer service and expanding broadband Internet throughout northern New England.

FairPoint has about 4,000 employees, nearly 3,400 of which are in northern New England.

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