f Awaits Cuts
Telecom & Wireless Technology
16 ARKANSAS BUSINESS
at Alltel Corp., Little Rock 5,500
6
5,000
9
4,500
’99
’00
’01
3,042
’98
3,600
5,200
’96
13 3,400
4,800
’95
2,500 ’93
12
11 3,500
3,000
Staff Ranking*
4,800
14
13
4,500
13
3,500
4,400
4,000
9
8
10
3,671
But interviews with an Alltel veteran, local economic development experts and the CFO of Windstream Corp. indicate that the area should be able to absorb many of the workers potentially displaced because of the merger. There aren’t any easy ways to identify employers that would afford significant numbers of job options for exiting Alltel staffers, said Greg Hamilton, director of research at the Institute for Economic Advancement at the University of Arkansas at Little Rock. He believes, however, that the stability of the central Arkansas economy will help buffer the effect of job losses at Alltel. “If I were a corporate employee looking for a job, I could do a lot worse than the Little Rock area,” Hamilton said. Economic forecasts indicate a healthy number of job opportunities are scattered around the market, especially in the area of professional business services, a sector that many corporate employees could plug into. “That would suggest to me there’s room to absorb a good many of those people,” he said. Neither Alltel nor Verizon wants to talk about any changes resulting from the merger until the transaction passes regulatory scrutiny. Although officially under review by the Federal Communications Commission and the Justice Department, the pending acquisition is considered as all but a done deal that should close by year’s end. And it could be months after that before Verizon announces what a postmerger Little Rock work force will look like. The job paring could be a slow process as well. “You just don’t know until the transition plan is announced,” said Jerry Fetzer, a 28-year veteran with Alltel. “The thing you want to do is make sure the customer doesn’t feel the change. If you don’t, you will begin losing customers, and Verizon is paying a lot of money for Alltel’s customers.” Fetzer, part of Alltel’s mergers and acquisition team, chose to take early retirement this year after working nearly three decades for the company in corporate finance. “At some point you could see some action would happen, but I think it happened a lot sooner than what everyone anticipated,” he said. “I guess the market conditions accelerated that. It’s unfortunate for a lot of people. “Some [Alltel] people are already job hunting. They don’t think Verizon
Arkansas Employment
3,345
(continued from Page 1)
2,959
Alltel: Staff Awaits Corporate Cuts
July 21, 2008
’02
’03
’05
’06
’07
16
*Ranking among largest employers in Arkansas, compiled by Arkansas Business.
would’ve made the announcement unless they were confident the deal would go through.” Fetzer, now an audit partner with the Little Rock accounting firm of Miller & Co., was pleasantly surprised at the local employment opportunities. “The job market when I got out here was a lot better than I thought, at least in my area,” he said. “But there were about 400 in accounting and finance alone [at Alltel] when I left. “That’s going to be a lot to absorb. If all those people are displaced, it’s going to take a while for all that to work itself out.”
Possibilities: HP, Start-Ups
The biggest source of new job opportunities in central Arkansas won’t begin filling the first of an announced 1,200 jobs until next year. HewlettPackard Co. of Palo Alto, Calif., is expected to put the first round of hires to work in late 2009. The staffing of its 150,000-SF customer service and technical support center in Conway is described as a four-year process. The $28 million HP development will provide some options for displaced Alltel workers, but the possibilities for corporate positions involving management, finance, legal and marketing seem limited. “The thing it boils down to is what jobs and when?” Fetzer said of the expected job cuts at Alltel. “You can common-sense things out, but until Alltel or Verizon comes out and says something, we just don’t know. “There are a lot of employees at Alltel who would really like to know and so would their customers.” A more shadowy employment possibility for Alltel staffers are new businesses that could form in the wake of the Verizon buyout. Scott Ford, Alltel’s CEO, has indicated such a possibility, and he’s not the only one. Brent Whittington, executive vice
president and chief financial officer at Windstream, also alludes to the prospect of new ventures arising after the Alltel sale. “We clearly know a lot of their people, and there are a lot of smart and talented people over there,” he said. “It wouldn’t surprise me if several start-up businesses cropped up around town before it’s all said and done.” Jay Chesshir, president and chief executive officer of the Little Rock Regional Chamber of Commerce, won’t be surprised either. “There are certainly ideas getting kicked around in terms Jay Chesshir of start-ups or smaller companies that could be headquartered here,” Chesshir said. “People are actively looking for opportunities while this transition moves forward. This group of people likes living here and wants to continue making a living for their family here.” The chamber also is spreading the word to site consultants to put Little Rock on their checklists of communities that could have an available pool of corporate talent for expansionminded companies interested in the area.
Corporate Shift
Jerry Fetzer describes Alltel’s employment growth in Little Rock over the years as a mixture of new jobs and relocating staffers from outof-state offices. Acquisitions followed by corporate consolidations fueled the number of relocating jobs to Little Rock. “A lot of the people I worked with on a day-to-day basis came from other companies we bought,” Fetzer said. A sampling of Alltel buys since 1998
includes 360 Communications Co. of Chicago, Aliant Communications Co. of Lincoln, Neb., Western Wireless Corp. of Bellevue, Wash., and MidWest Wireless of Mankato, Minn. The 1990s was a decade of expanding Alltel employment in Little Rock as the company consolidated its headquarters operations and set out to become a serious player in the wireless market. Before 1991, Alltel once operated as a dual-headquartered company shared between Little Rock and Hudson, Ohio. It was an arrangement that grew out of the 1983 merger of Allied Telephone and MidContinent Telephone Corp. that created Alltel. Given that Mid-Continent was four times larger than Allied Telephone, it’s unusual that Little Rock emerged as the headquarters for the combined operations. But it was really Allied Telephone, with its younger executive team, that bought the much bigger Mid-Continent. The corporate shift began in earnest in 1987 when Alltel’s president, Joe Ford, succeeded Mid-Continent’s founder, Weldon Case, as CEO. Alltel had 280 employees in Little Rock when the first Riverdale building was constructed in the early 1980s. The census of Alltel’s Arkansas staff was on the ascent until 2001 when the company reported a peak employment of 5,200. With the bulk of those in Little Rock, the headcount is down to about 3,000 these days. The biggest employment variable at play for the company during the past seven years is the $1.05 billion sale of Alltel Information Services to Fidelity National Financial Inc. of Jacksonville, Fla. The 2003 transaction removed about 1,200 from Alltel’s Arkansas payroll. That deal was followed by the July 2006 spin-off of Alltel’s wireline business to create Little Rock’s Windstream Corp., the biggest rural exchange carrier in the country. The $9.1 billion transaction, which included the acquisition of Valor Communications Group Inc. of Irving, Texas, reduced the company’s total employment in Arkansas by about 1,100. Last year’s move to take Alltel private in the $27.5 billion sale to TPG Capital and GS Capital Partners was viewed as a final play to keep the company an independent, growing concern. However, that position became tenuous after Alltel came out of the FCC’s 700-megahertz wireless spectrum auction empty-handed this year. “When that happened, the handwriting was on the wall,” said one Alltel insider regarding the company’s future. n
16 ARKANSAS BUSINESS
at Alltel Corp., Little Rock 5,500
6
5,000
9
4,500
’99
’00
’01
3,042
’98
3,600
5,200
’96
13 3,400
4,800
’95
2,500 ’93
12
11 3,500
3,000
Staff Ranking*
4,800
14
13
4,500
13
3,500
4,400
4,000
9
8
10
3,671
But interviews with an Alltel veteran, local economic development experts and the CFO of Windstream Corp. indicate that the area should be able to absorb many of the workers potentially displaced because of the merger. There aren’t any easy ways to identify employers that would afford significant numbers of job options for exiting Alltel staffers, said Greg Hamilton, director of research at the Institute for Economic Advancement at the University of Arkansas at Little Rock. He believes, however, that the stability of the central Arkansas economy will help buffer the effect of job losses at Alltel. “If I were a corporate employee looking for a job, I could do a lot worse than the Little Rock area,” Hamilton said. Economic forecasts indicate a healthy number of job opportunities are scattered around the market, especially in the area of professional business services, a sector that many corporate employees could plug into. “That would suggest to me there’s room to absorb a good many of those people,” he said. Neither Alltel nor Verizon wants to talk about any changes resulting from the merger until the transaction passes regulatory scrutiny. Although officially under review by the Federal Communications Commission and the Justice Department, the pending acquisition is considered as all but a done deal that should close by year’s end. And it could be months after that before Verizon announces what a postmerger Little Rock work force will look like. The job paring could be a slow process as well. “You just don’t know until the transition plan is announced,” said Jerry Fetzer, a 28-year veteran with Alltel. “The thing you want to do is make sure the customer doesn’t feel the change. If you don’t, you will begin losing customers, and Verizon is paying a lot of money for Alltel’s customers.” Fetzer, part of Alltel’s mergers and acquisition team, chose to take early retirement this year after working nearly three decades for the company in corporate finance. “At some point you could see some action would happen, but I think it happened a lot sooner than what everyone anticipated,” he said. “I guess the market conditions accelerated that. It’s unfortunate for a lot of people. “Some [Alltel] people are already job hunting. They don’t think Verizon
Arkansas Employment
3,345
(continued from Page 1)
2,959
Alltel: Staff Awaits Corporate Cuts
July 21, 2008
’02
’03
’05
’06
’07
16
*Ranking among largest employers in Arkansas, compiled by Arkansas Business.
would’ve made the announcement unless they were confident the deal would go through.” Fetzer, now an audit partner with the Little Rock accounting firm of Miller & Co., was pleasantly surprised at the local employment opportunities. “The job market when I got out here was a lot better than I thought, at least in my area,” he said. “But there were about 400 in accounting and finance alone [at Alltel] when I left. “That’s going to be a lot to absorb. If all those people are displaced, it’s going to take a while for all that to work itself out.”
Possibilities: HP, Start-Ups
The biggest source of new job opportunities in central Arkansas won’t begin filling the first of an announced 1,200 jobs until next year. HewlettPackard Co. of Palo Alto, Calif., is expected to put the first round of hires to work in late 2009. The staffing of its 150,000-SF customer service and technical support center in Conway is described as a four-year process. The $28 million HP development will provide some options for displaced Alltel workers, but the possibilities for corporate positions involving management, finance, legal and marketing seem limited. “The thing it boils down to is what jobs and when?” Fetzer said of the expected job cuts at Alltel. “You can common-sense things out, but until Alltel or Verizon comes out and says something, we just don’t know. “There are a lot of employees at Alltel who would really like to know and so would their customers.” A more shadowy employment possibility for Alltel staffers are new businesses that could form in the wake of the Verizon buyout. Scott Ford, Alltel’s CEO, has indicated such a possibility, and he’s not the only one. Brent Whittington, executive vice
president and chief financial officer at Windstream, also alludes to the prospect of new ventures arising after the Alltel sale. “We clearly know a lot of their people, and there are a lot of smart and talented people over there,” he said. “It wouldn’t surprise me if several start-up businesses cropped up around town before it’s all said and done.” Jay Chesshir, president and chief executive officer of the Little Rock Regional Chamber of Commerce, won’t be surprised either. “There are certainly ideas getting kicked around in terms Jay Chesshir of start-ups or smaller companies that could be headquartered here,” Chesshir said. “People are actively looking for opportunities while this transition moves forward. This group of people likes living here and wants to continue making a living for their family here.” The chamber also is spreading the word to site consultants to put Little Rock on their checklists of communities that could have an available pool of corporate talent for expansionminded companies interested in the area.
Corporate Shift
Jerry Fetzer describes Alltel’s employment growth in Little Rock over the years as a mixture of new jobs and relocating staffers from outof-state offices. Acquisitions followed by corporate consolidations fueled the number of relocating jobs to Little Rock. “A lot of the people I worked with on a day-to-day basis came from other companies we bought,” Fetzer said. A sampling of Alltel buys since 1998
includes 360 Communications Co. of Chicago, Aliant Communications Co. of Lincoln, Neb., Western Wireless Corp. of Bellevue, Wash., and MidWest Wireless of Mankato, Minn. The 1990s was a decade of expanding Alltel employment in Little Rock as the company consolidated its headquarters operations and set out to become a serious player in the wireless market. Before 1991, Alltel once operated as a dual-headquartered company shared between Little Rock and Hudson, Ohio. It was an arrangement that grew out of the 1983 merger of Allied Telephone and MidContinent Telephone Corp. that created Alltel. Given that Mid-Continent was four times larger than Allied Telephone, it’s unusual that Little Rock emerged as the headquarters for the combined operations. But it was really Allied Telephone, with its younger executive team, that bought the much bigger Mid-Continent. The corporate shift began in earnest in 1987 when Alltel’s president, Joe Ford, succeeded Mid-Continent’s founder, Weldon Case, as CEO. Alltel had 280 employees in Little Rock when the first Riverdale building was constructed in the early 1980s. The census of Alltel’s Arkansas staff was on the ascent until 2001 when the company reported a peak employment of 5,200. With the bulk of those in Little Rock, the headcount is down to about 3,000 these days. The biggest employment variable at play for the company during the past seven years is the $1.05 billion sale of Alltel Information Services to Fidelity National Financial Inc. of Jacksonville, Fla. The 2003 transaction removed about 1,200 from Alltel’s Arkansas payroll. That deal was followed by the July 2006 spin-off of Alltel’s wireline business to create Little Rock’s Windstream Corp., the biggest rural exchange carrier in the country. The $9.1 billion transaction, which included the acquisition of Valor Communications Group Inc. of Irving, Texas, reduced the company’s total employment in Arkansas by about 1,100. Last year’s move to take Alltel private in the $27.5 billion sale to TPG Capital and GS Capital Partners was viewed as a final play to keep the company an independent, growing concern. However, that position became tenuous after Alltel came out of the FCC’s 700-megahertz wireless spectrum auction empty-handed this year. “When that happened, the handwriting was on the wall,” said one Alltel insider regarding the company’s future. n
