■ Analysis · July 22, 2026
Verizon Cuts 3,000 Jobs, Transfers 274 Stores to Franchisees; 6.5% Dividend Remains Covered
Verizon is cutting 3,000 jobs and converting 274 stores to franchises ahead of Q2 earnings. Despite restructuring, the 6.5% dividend appears safe with free cash flow covering payouts nearly twice over.
Restructuring Continues Under CEO Dan Schulman
Verizon (VZ) announced it will sell 274 company-owned retail stores to franchise operators and eliminate about 500 corporate positions, affecting roughly 3,000 employees. The changes take effect in mid-August and follow over 13,000 job cuts announced in November. This is part of CEO Dan Schulman's strategy to build a leaner company since taking over in October. After the latest moves, Verizon will have about 1,000 corporate-owned stores. Most affected retail employees will transition to the franchise operators rather than lose their jobs entirely.
Financial Performance and Dividend Safety
Despite the downsizing, Verizon's financial results have improved. First-quarter revenue rose 2.9% year over year to $34.4 billion, and adjusted earnings per share climbed 7.6% to $1.28—the best quarterly growth on that measure since 2021. The company added 55,000 postpaid phone customers in Q1, its first positive first-quarter result on that metric since 2013. Broadband added 341,000 net customers, including 214,000 fixed wireless access connections. Management raised full-year guidance, now expecting adjusted EPS growth of 5% to 6%.
Free cash flow in Q1 was $3.8 billion, up 4% year over year. For the full year, Verizon guided for free cash flow of at least $21.5 billion, while capital expenditures are expected to be $16 billion to $16.5 billion. The dividend costs about $11.2 billion annually, meaning guided free cash flow covers the payout nearly twice over. Verizon has increased its dividend for 20 consecutive years, a streak extended in January. The stock trades at about 10 times earnings, with a payout ratio near two-thirds—typical for a telecom.
Key Metrics to Watch in Q2 Earnings
Verizon reports second-quarter earnings on July 24. Key items to monitor include free cash flow, postpaid phone additions against the full-year target of 750,000 to 1 million (management expects the upper half), and service revenue growth, which was dented by a January network outage. Mobility and broadband service revenue rose just 1.6% year over year in Q1.
What It Means for Income Investors
With free cash flow covering the dividend nearly twice over and subscriber trends improving, the 6.5% yield appears well supported. The restructuring is aimed at improving efficiency, and the company's dividend history shows a 20-year streak of increases. However, sustained revenue growth remains a challenge, making the upcoming earnings report important for assessing long-term dividend sustainability.
Reporting based on: The Motley Fool. Figures verified against market data where available.