Shenandoah Telecommunications Company Announces Organizational Restructuring Plans
Posted 6 April 2021 12:00 AM by Shentel
EDINBURG, Va., April 5, 2021 (GLOBE NEWSWIRE) – Shenandoah Telecommunications Company ("Shentel" or the "Company") (NASDAQ: SHEN) announced today that it is implementing a workforce reduction in anticipation of the closing of the pending sale of its wireless assets and certain liabilities ("Shentel Wireless") to T-Mobile US, Inc. ("T-Mobile"). The organizational restructuring plan is expected to impact approximately 340 employees, or 30%, of the Company’s workforce, across its six-state Mid-Atlantic service area. Approximately 90% 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 Company in 2021, following the closing of the pending Shentel Wireless sale and any required transition services. 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 the Company'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. 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."
About Shenandoah Telecommunications
Shenandoah Telecommunications Company provides a broad range of diversified communications services through its high speed, state-of-the-art wireless, cable, fiber optic and fixed wireless networks to customers in the Mid-Atlantic United States. Shentel’s services include: wireless voice and data; broadband internet, video, and digital voice; fiber optic Ethernet, wavelength and leasing; telephone voice and digital subscriber line; and tower colocation leasing. Shentel is the exclusive personal communications service ("PCS") Affiliate of Sprint in a multi-state area covering large portions of central and western Virginia, south-central Pennsylvania, West Virginia, and portions of Maryland, Kentucky, and Ohio. For more information, please visit www.shentel.com.
This release contains forward-looking statements about Shentel regarding, among other things, its business strategy, and its prospects. These statements can be identified by the use of forward-looking terminology such as "believes," "estimates," "expects," "intends," "may," "will," "should," "could," or "anticipates" or the negative or other variation of these or similar words, or by discussions of strategy or risks and uncertainties. The forward-looking statements are based upon management’s beliefs, assumptions and current expectations and may include comments as to Shentel’s beliefs and expectations as to future events and trends affecting its business that are necessarily subject to uncertainties, many of which are outside Shentel’s control. Although management believes that the expectations reflected in the forward-looking statements are reasonable, forward-looking statements, including with respect to consummating the sale of Shentel Wireless, expected employee termination costs and expected expense savings, are not, and should not be relied upon as, a guarantee of future performance or results, nor will they necessarily prove to be accurate indications of the times at which such performance or results will be achieved, and actual results may differ materially from those contained in or implied by the forward-looking statements as a result of various factors. For example, this release discusses the anticipated sale of Shentel Wireless to T-Mobile, but Shentel and T-Mobile have not yet entered into a definitive agreement with respect to the anticipated transaction, and any such definitive agreement will be subject to certain closing conditions, including receipt of certain required regulatory approvals. As a result, there can be no assurance that Shentel and T-Mobile will enter into such a definitive agreement or that the closing of the transactions contemplated by any such definitive agreement will occur or will not be delayed. A discussion of other factors that may cause actual results to differ from management’s projections, forecasts, estimates and expectations is available in Shentel’s filings with the Securities and Exchange Commission. Those factors may include natural disasters, pandemics and outbreaks of contagious diseases and other adverse public health developments, such as COVID-19, changes in general economic conditions, increases in costs, changes in regulation and other competitive factors. The forward-looking statements included are made only as of the date of the statement. Shentel undertakes no obligation to revise or update such statements to reflect current events or circumstances after the date hereof, or to reflect the occurrence of unanticipated events, except as required by law.
Shenandoah Telecommunications Company
Vice President & Chief Human Resources Officer