Shenandoah Telecommunications (NASDAQ: SHEN) announced yesterday that it is implementing a workforce reduction in anticipation of the pending sale of its wireless assets and certain liabilities to T-Mobile US. The organizational restructuring plan is expected to impact approximately 340 employees, or 30 percent, of the company’s workforce, across its six-state Mid-Atlantic service area.
Approximately 90 percent of the reductions are employees who support wireless operations and who will not automatically transfer to T-Mobile as part of the transaction. Most of the employees impacted by the workforce reduction will exit the telecom provider in 2021, following the sale.
The closing of the Shentel Wireless sale is now expected to occur in early third quarter 2021 subject to execution of the definitive asset purchase agreement, customary closing conditions and required regulatory approvals. Shentel will have approximately 860 employees following the restructuring to support its broadband and tower segments.
In connection with this workforce reduction, the company will incur certain termination expenses, to be settled in cash, with approximately $1.7 million related to continuing operations and approximately $4.5 million related to discontinued operations. The company expects to incur a majority of these costs during the third quarter of 2021. The workforce reduction is expected to decrease Shentel’’s annualized run-rate operating expenses for continuing operations by approximately $4 million.
“We announced to our employees today the necessary plans to begin to reduce the size of our workforce for the anticipated divestiture of our wireless assets and operations. Although this change was anticipated, its impact will cause disruption and uncertainty for the affected employees and their families,” said President and CEO, Christopher E. French. “We are coordinating with T-Mobile to assist in transitioning as many of the affected employees as possible to T-Mobile following closing of the transaction.”
“We are proactively providing career transition services to all impacted employees, regardless of whether they are hired by T-Mobile, to help them during this time,” said French. “Additionally, we will provide severance pay and benefits, inclusive of the new American Rescue Plan Act COBRA subsidy requirements, to all impacted employees who are not hired by T-Mobile. The company also plans to provide a special one-time 401(k) contribution to all eligible employees, as well as a one-time cash bonus payment to all eligible impacted employees, to assist and support our employees during this transition.”