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CenturyTel's Embarq Buy May Set Off Consolidation

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[qi:062] Times are tough in the landline business, and when times get tough, the tough go shopping. After a few weeks of seeking a suitor, Embarq (s EQ), the landline unit spun off from Sprint in 2006, has enticed CenturyTel into paying $5.8 billion in stock and assuming $5.8 billion in debt for the nation’s fourth largest local exchange carrier.

CenturyTel (s CTL) is the seventh largest local exchange carrier (LEC) in the U.S., based on access lines in service (2.1 million ) and high-speed Internet connections deployed (more than 600,000). The combined Embarq-CenturyTel would operate in 33 states and have about 8 million telephone access lines, 2 million high-speed Internet customers and about 400,000 video subscribers.

As competition with cable companies and new wireless broadband products increases, smaller, rural telcos are seeking to buy scale in order to compete. In February, the nation’s fifth largest LEC, Windstream, purchased a tiny North Carolina carrier and had been a suspected suitor for Embarq. Given the erosion of their core business and the grim credit markets, it’s likely that buyers with strong stock or a little cash could pay less of a premium on assets that give them the ability to expand without building out their own infrastrucutre. TDS Telecom (s TDS) and Frontier Communications (s FTR) are probably eyeing their own balance sheets and opportunities.

27 Responses to “CenturyTel's Embarq Buy May Set Off Consolidation”

    • We’ll find out soon ourselves. I’m with Qwest, which is not such a great company either. Most of us would take back US WEST in a heartbeat, along with all of its faults. Qwest has proven to be a greedy company, freezing our pay raises for going on the third year now. The question in everybody’s mind is, is CenturyLink even greedier than Qwest? And that’s a good question.
      There are rumors flying about what happened to Embarq. Stories of those who are left, having their pay cut to remain and being turned into contractors so that they have no benefits. But there is nothing I can find to qualify those rumors online. People here don’t seem to be saying either. However, I do tend to think that importing foreign greencard workers to bust the CWA union is more fiction than fact. Qwest has a very powerful union and I don’t think CenturyLink will do very well if they call a big strike next year. It’ll be interesting, to say the least. And just to be sure, I’m fixing up my resume and beginning to look around.

  1. CenturyTel will shred the Embarq employees apart. They are specialized in taking over other companies and laying off the majority of new employees and shifting the work to their over worked employees. We had a good company named Pacific Telecom before these southern Bayou baffoons came in and bought the company. They closed the main offices, laying off employees, and made everyone they could go to salary. They will make grand promises up front about how great they work and help out with contract employees but you will soon be working 12-14 hours days on salary before getting laid off. Greedy ex-GTE management. Not to be trusted.

  2. CenturyLink drug test all your employees now

    I worked for Sprint/Embarq, too. They laid me (and several others) off and replaced us with contractors from Asia (Sri Lanka, India, Malaysia). These people came into the USA thru Canada and have taken the jobs of hard working American workers. These contractors (from Sri Lanka, India, Malaysia) are the sleaziest creed of people in the world. You cannot trust these people and you cannot trust Emabrq/CenturyLink. Embarq has the worst managers I have ever seen. They treat their employees like dirt. Embarq will not provide any training and their senior technicians will make sure your career at Embarq is a short lived career of employment. Emabrq should drug test all their current employees immediately.

    Embarq stands for:
    E-srey M-ade B-illions A-nd R-an Q-uickly

  3. Embarq employees have been getting let go since the 1st quarter of 2009.
    I guess layoffs are in small groups to avoid having to give the notice required by the Federal government.

  4. There are employees on both sides that are toast…and this is only the start… Access Lines are still being lost,,which means employees have to go to support that lost revenue…

  5. bumholio

    What’s the layoff projections right now? Are Embarq folks toast? Are the CenturyTel guys going to be moving into our offices and setting their pencil holders and family pictures on our desks before we have even cleared out?

    Please, tell me. Spare us any more suspense.

  6. I’m not with century tel, i’m with Embarq. But I”m currently on the list to go to Chairman’s Club this coming year and have been top gun for 3 times straight (only working for the company long enough to be involved with three top guns). I’m also in the Oh and Pa specialty q. I just wanted to place my input on what all and howl Embarq has been treating its reps badly. When they came out with the Universal and Acquisition queues our performance pay got cut in half. It’s sad that I’m the top one percent of the company in call centers, however, I don’t necessarily meet my quota every month. My average sales were ALWAYS above 170 percent and now they’re down to 110-130. Nothing has really changed with the amount I sale, they just decided to triple our quota and take all sales calls away from us! Does this sound like the kind of hard work respect a company should give its employees? I don’t know if any of you are aware of it, but the new name for the merged company is going to be CenturyLink. lol, somebody had more pull than the other:P

  7. I also would like to know what is the Century Tel severance package like?
    And does CTL haev any buyouts if a person service is greater that 35 years ?

  8. Be thankful you have a job….I work for Embarq also and work in Vegas….our unemployment is the highest in the nation…the only good thing is I have 38 years….and this is my last year…..If you don’t like the company…come to Vegas and try to get another job….and if you don’t like what management is doing…become a manager and everyone will watch you do the same thing….

      • Lorraine

        Just want to let you know Centurytel does work to take care of their employees. Please understand every business right now is strong arming new corporations in take overs and I hope to know you has family with this merger. Our health benefits are really good I know for myself and my child I pay under $100.00 a month for health, dental, & Vision. They actually give us 2 plans to choose from. I know layoffs are scary and I am going to let Embarq employees know that even we are scared since CenturyTel has been laying their own employees off as well when mergers occur.

  9. I too work for Embarq. We got the notice we are being laid off next year. Used to love my job but with each sellout it gets worse. Customers blame us for not knowing how to handle their complaints when it is management fault for not wanting to talk to customers. We only do what we are told to do but customers get mad and one told me he hoped we had a fire so he would be rid of incompetent people like me. I face losing years of benefits and paying more for my insurance than ever before while the CEO gets his hefty rewards.

  10. Alexandria

    My father works for Embarq and is stressing big time over this buyout. It seems hard work, dedication, long, thankless hours of being on call and answering pages in the middle of the night get you absolutley NOWHERE. Tell me top dogs…what will you do when there’s no one left to do the mundane tasks below you?

  11. Jr. Sample

    Embarq employees: I am sad to hear the news of the merger. Centurytel proudly announced the merger (buyout) to their employees and today November 13, are going around the state laying of employees. Something they failed to mention. I assure you Centurytel will further rape and pillage your company. Their stock price rose with a set of layoffs several years ago and all the top fat cats sold their stock at a profit. Don’t just walk, RUN.

  12. Well good luck Embarq employees. Century-Tel swoops in like a knight in shining armor, touting that they are going to make things better for the employees and the customers. They are nothing but a wolf in sheeps clothing. They recently acquired MebTel/Madison River, and everything has gone downhill since. Layoffs, closures, forced overtime, strong arm tactics, anti-union, sex discrimination…that’s what you can expect. I hate to say it, but get out while the gettin’s good.

  13. Samantha

    Fifteen years ago, what is now called Embarq, was a good place to work with decent pay and benefits. Many top executives had worked their way up from the bottom. In other words, they were “telephone” people who understood and cared about our business.

    We had real leadership and we were in business together to provide reliable service. We took pride in our company we cared about our customers. Everyone was a valued team member from the janitors to the executives.

    Over the years there has been vast technological change in our business, but the biggest change of all has been the mindset of our executives. Beginning with Bill Esrey and types like his buddy, Bernie Ebbers of WorldCom, our business has taken over by executives with a penchant for greed.

    These executives put profits ahead of people, employees and customers alike, which created a corporate culture of the “haves” and the “have-nots.” For years, hourly worker’s wages have been eroded by increased health insurance premiums as the company shifted more and more of the cost to the employees. In fact, Embarq’s hourly wage increases have not even kept pace with inflation.

    This is not the case with our executives. Their compensation exceeds their health insurance premiums and then some. Last year Dan Hesse (then Embarq CEO) raked in $273,289 while the average hourly Embarq worker was paid $30,000. The discrepancy between executive pay and hourly pay is disgraceful.

    In other words, hourly workers are taking home less and less while the executives take home more and more. The company is a mere shadow of its former self in what it provides to customers and hourly employees alike.

    Time will tell if CenturyTel executives are more fair minded, but since my department is being consolidated soon, I might not be around to know.

  14. I too work for Embarq. All of the take over info as of late was pushed of as rumor and speculation by the execs to the workforce. Embarq is a company of fat cats that have sat back and watched it impload upon itself. No new business has developed and now it is said that Verizon has pulled the plug on using Embarq as a logistics provider. The consensus from the employee associate is that we have incompetent mangement that are sitting around planning how to spend their gigantic severence packages.

  15. I have worked for Embarq (aka Sprint, aka Sprint Mid-Atlantic Telecome, aka Carolina Telephone and Telegraph)for 13 years and during that time I have seen “THEM” come and seen “THEM” go….all I can say is I hope this company CenturyTel wants to be a “REAL” telephone company instead of making “US” the local phone company it’s cash cow….like Sprint and Embarq have done….Use to when you worked for the “local telephone company” it was a “good” job you could be proud of….Now it is not that way…..Last week I got a notice along with all the other 18,000 employees (this count was on Dec 31, 2007 before they laid several thousand off)or however many of us are left after cutting us to the bare bone to set us up for this sale….that Embarq (which is a self insured company….meaning we are the insurance company) is going up $200.00 a month on my insurance premiums and $100.00 a month on my two types of insulin…..what a great company to work for!!!! Good luck CenturyTel with turning “US” around after we have been raped of all of our assets by not one set but two sets of plunders……TakeaStand TERESA