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Verizon Brand Takes a Hit With Consumers As Strike Drags On

April 27, 2016, 9:01 PM UTC
Striking Verizon workers on a picket line
Aaron Pressman

Consumer opinion about Verizon has dropped to its lowest level in three years as a strike of some 40,000 workers against the telecommunications giant dragged into a third week.

Verizon’s score in consumer surveys conducted by YouGov Brandindex dropped from 18 before the strike to 9, the lowest level since news broke in 2013 of the company sharing millions of phone records with the National Security Agency. The YouGov rating, which can range from +100 to -100, is generated by asking thousands of consumers a day: “If you’ve heard anything about the brand in the last two weeks, through advertising, news or word of mouth, was it positive or negative?”

The survey is the first indication that the strikers could have an impact on Verizon’s (VZ) business. The company did not immediately respond to a request for comment.

Wireless customers likely won’t react as quickly to a perceived damaged brand as customers of something like a casual dining restaurants would, says Ted Marzilli, CEO of Yougov. But there could be a slow and steady impact if the strike drags on as customers come to the end of phone contracts or are considering switching service.

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Thousands of Verizon employees from Massachusetts to Virginia walked off the job on April 13 after working without a contract for nine months. They have picketed Verizon retail stores and called for a boycott of the company’s services. They have also accused Verizon of wanting to outsource jobs to Mexico and cut wages and benefits.

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Verizon said last week that it hadn’t felt any serious financial impact from the strike or the call for a boycott yet. “Right now, really no financial impact per se in the second quarter that I’m anticipating unless this drags on for a much longer period of time,” Verizon CFO Fran Shammo said on an April 21 call with Wall Street analysts

There has been no indication how long the strike might last from representatives for the two unions involved, the Communications Workers of America and the International Brotherhood of Electrical Workers. A similar job action in 2011 lasted only about two weeks, but it then took another year for the sides to reach agreement on a new contract.