Verizon eliminates 3,000 retail positions as artificial intelligence takes over customer service functions and stores transition to franchising.

      Verizon is set to lay off approximately 3,000 retail employees and reassign 274 corporate stores to independent operators, as reported by Bloomberg on Thursday. These changes will be effective from August 16, leaving the largest mobile carrier in the U.S. with 1,000 company-owned stores and around 5,000 independent franchises. A spokesperson for the company mentioned that many of the employees at the stores being transferred are expected to be retained by the new owners, but will no longer be part of Verizon's payroll.

      This marks the third significant round of layoffs since CEO Dan Schulman took over in October 2025, after leading PayPal for nearly ten years. In November, Verizon reduced 20 percent of its nonunion staff, which amounted to about 13,000 employees, as part of a strategy to save $5 billion in operating costs by the end of 2026. Additional cuts were made in May.

      Schulman has been clear about his cost-saving expectations, stating in a June interview with Bloomberg that he anticipates artificial intelligence will take over "a large percentage" of customer service roles, especially for routine tasks like billing inquiries and account adjustments. Verizon has claimed that its AI systems currently achieve satisfaction scores nearly 13 percent better than human agents for similar interactions.

      The transition from corporate stores to franchises allows Verizon to decrease fixed retail costs and transfer operational risks to independent owners, a common strategy in an industry that is shifting payroll expenses into capital investments. Verizon has also rolled out a simplified wireless plan and a new loyalty rewards program aimed at providing discounts to current customers, efforts intended to mitigate subscriber losses amid growing competition from T-Mobile and cable companies.

      The telecom sector's adoption of AI-focused cost reductions reflects a broader trend across corporate America. JPMorgan CEO Jamie Dimon noted that AI has already eliminated 30 to 40 percent of jobs in certain divisions, while the tech sector alone has lost over 95,000 jobs in 2026, with nearly half of hiring managers identifying AI as the main reason. Verizon is expected to announce its second-quarter earnings on July 24.

      However, Schulman has not commented on whether AI can effectively mimic the various roles performed by in-store retail employees, which include more than just answering billing questions, such as managing device trade-ins, troubleshooting hardware issues, and engaging in face-to-face sales. The franchise operators taking over the 274 stores will require the same workforce to continue those functions, albeit at a reduced cost to Verizon. Thus, the jobs are not vanishing but rather shifting from one balance sheet to another.