Verizon Makes Controversial Move To Land $20 Billion Acquisition

Verizon (VZ) , one of the top mobile providers in the U.S., has opted to make a desperate move to secure a $20 billion deal to expand its fiber internet services nationwide.

In September last year, Verizon announced its plans to acquire internet giant Frontier Communications to accelerate the delivery of its “mobility and broadband services to current and new customers.”

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“Frontier customers and those previously outside Verizon’s fiber footprint are expected to gain more choice and access to Verizon’s premium mobility, home internet, streaming and connected home offerings, alongside premium business products like Verizon Business Complete,” said Verizon in a press release last year.

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After several months, the Federal Communications Commission finally approved the $20 deal, allowing Verizon to expand Frontier’s network in 25 states and deploy fiber internet to 1 million or more U.S. homes per year.

“By approving this deal, the FCC ensures that Americans will benefit from a series of good and commonsense wins,” said FCC Chair Brendan Carr in a May 16 press release. “The transaction will unleash billions of dollars in new infrastructure builds in communities across the country — including rural America. This investment will accelerate the transition away from old, copper line networks to modern, high-speed ones. And it delivers for America’s tower and telecom crews who do the hard, often gritty work needed to build high-speed networks.”

However, Verizon agreed to sacrifice its diversity, equity, and inclusion policies to secure the acquisition.

“Verizon has also committed to ending DEI-related practices as specified in the FCC’s record and has reaffirmed the merged entity’s commitment to equal opportunity and nondiscrimination,” reads the press release. “This will ensure that the combined business will enact policies and practices consistent with the law and the public interest.”

Image source: Morris/Bloomberg via Getty Images

Verizon lists which DEI initiatives are getting the boot

The announcement from the FCC comes after Verizon sent a letter to Carr on May 15 stating that it has been “evaluating” its DEI policies amid the changing legal landscape surrounding DEI.

“In response to this changing landscape, Verizon has been evaluating its DEI-related programs, HR processes, supplier programs, training programs and materials, and other initiatives,” said Verizon Chief Legal Officer Vandana Venkatesh in the letter. “In doing so, Verizon recognizes that some DEI policies and practices could be associated with discrimination.”

Some of the cuts Verizon made to its DEI policies include retiring its team and any individual job roles that are focused on DEI. It also committed to removing references to DEI from its employee training materials, ensuring that the materials are focused on “achieving the company’s core business objectives.”

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Verizon also vowed to remove all representation hiring goals and will “modify” its approach to supplier diversity by ending quantitative goals for diverse spend. It will instead focus on increasing opportunities for small businesses.

In addition, Verizon will shut down its “Diversity and Inclusion” website and will no longer offer scholarships, internships, and career development programs that are “limited by race, gender, or other demographic characteristics.”

“Verizon is making these changes to its practices not just in name or in the way they are described, but in substance,” said Venkatesh in the letter. “These changes are effective immediately.”

Verizon joins a growing list of companies cutting DEI

The move from Verizon to cut its DEI practices comes after President Donald Trump issued an executive order in January that dismantles the federal government’s DEI programs. In the executive order, he claims that the programs enforce “illegal and immoral discrimination.”

Before the executive order was issued, many large companies such as Walmart, Lowe’s, and Tractor Supply opted to either cut or scale back their DEI policies last year amid scrutiny and boycott threats from conservative consumers who criticized the companies for going “woke.”

More Labor:

• Amazon CEO gives hard-nosed message to employees
• IBM gives employees a rude awakening with harsh new policy
• Snapchat CEO teaches new employees a strict lesson

The decision also followed the U.S. Supreme Court’s ruling in 2023 to end affirmative action in college admissions, which raised legal questions around DEI programs in workplaces across the country.

More companies such as McDonald’s, Amazon, and Meta also followed suit in scaling back DEI in early January. While DEI has been put on the chopping block by some companies, others such as Costco and Apple have defended their DEI policies, claiming that they are in compliance with non-discrimination laws. 

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