CROWN CASTLE IS CUTTING ITS EMPLOYEE COUNT by 15%, totaling approximately 750 workers. The last time the towerco saw the need to trim its employee ranks was in late 2020, when 250 workers were let go.
Crown Castle Inc. initiated a restructuring plan this week as part of the company’s efforts to reduce costs to better align the company’s operational needs with lower tower activity, as discussed in Crown Castle’s second quarter 2023 earnings release.
Two years ago, Crown Castle built their 13-story corporate headquarters at 8020 Katy Freeway in Houston, TX, at an estimated cost of $55 million. In 2017, Crown Castle signed a 55,622 square-foot lease at 8000 Avalon (inset photo), a 224,000 square-foot office development in Alpharetta, GA. In connection with its office space consolidation plan throughout the country, the company estimates it will incur restructuring and related charges of approximately $50 million.
The plan includes reducing the company’s total employee headcount by approximately 15%, discontinuing installation services as a product offering within the towers segment while continuing to offer site development services on company towers, and consolidating office space.
How many Crown Castle tower technicians worked in the installation services group is unknown. However, there aren’t many based on a review of open positions during the past five months.
Most career opportunities were for project and deployment managers for network construction, and many field operations employees were involved in fiber optic installations.
Other construction managers were supervising Crown Castle’s network of subcontractors. T-Mobile relied upon Crown Castle for new site builds and site installations. Likely, work will now go to OEMs Ericsson and Nokia.
Ericsson is better positioned to continue T-Mobile’s construction since they have their own crews. Nokia primarily has project managers relying upon subcontractors to perform the carrier’s builds.
The announcement, caused by the recent slowdown in 5G new construction and expansion activity, saw Crown Castle’s stock continue to slide to $110.53 yesterday from its earlier year price of $181.21.
The news may have spilled over to another REIT, American Tower Corporation, whose stock closed down at $186.79 from its 52-week high of $282.47. REIT SBA Communications also was down to $220.24 from its 52-week high of $356.59. Digital Bridge was also down from its 52-week high of $23.44 to $16.11.
In connection with the plan, the company estimates it will incur aggregate restructuring and related charges of approximately $120 million, most of which it expects to incur in the third and fourth quarters of 2023.
In connection with the employee headcount reduction under the plan, the company estimates it will incur restructuring and related charges of approximately $70 million, substantially all of which would be cash expenditures consisting primarily of employee severance and other one-time termination benefits.
Regarding the office space consolidation under the plan, the company estimates it will incur restructuring and related charges of approximately $50 million, of which roughly $30 million will be cash expenditures related to remaining obligations under facility leases, with the remaining approximately $20 million representing the write-off of leasehold improvements.
Crown Castle said it does not anticipate any significant incremental, discrete cash expenditures related to discontinuing the company’s towers installation services other than related employee severance and other one-time termination benefits.
The actions associated with the employee headcount reduction and discontinuation of installation services under the plan are expected to be substantially completed by the end of the third quarter of 2023. However, the company expects to complete installation services under currently existing contracts.
