Citizens Telephone Cooperative, Floyd County’s largest private employer and a company facing serious financial problems, went public this week, granting The Floyd Press an interview to discuss the company’s "challenges."

What General Manager Greg Sapp told the newspaper appears to be a lot of corporate hyperbole and double speak.

Press editor Wanda Combs asked Sapp about the reports on this web site about recent meetings with employees where the company threatened layoffs and cutbacks in service if revenues did not increase by July.  Sapp refused to respond to those comments. Instead, he offered a company brochure overview that sounded a lot like the pabulum that is offered at the annual meeting each year.

Said Sapp:

For the past 20 years, the number of telephone customers rountinely grew from 5 to 7 percent.  Over the past two years, we started losing over 1 percent of telephone customers. This year, at this point in time, we’ve averaging a 2 percent (loss). That’s a 7 to 9 percent swing in the negative. That really throws our traditional business model, stands it on its head. The difference between where we were then and now is a difference of $1.6 million dollars.

When asked about the threat of employee layoffs, Sapp again refused to discuss specifics but told the Press:

We have to continue to operate to look at the workforce, the size it is versus what we need to operate at that time. Historically the company goes out of their way to protect the interest of employees.  The Cooperative is changing to reflect the changing market and economy so we can continue to provide the level of services customers demand at competitive prices and so that we can do that for a long time in the future. On any road to the future there’s always going to be a few bumps in the road.

"Bumps in the road" is usually corporate-speak for "hard times are here folks and some of you will lose your jobs."

Several Citizens employees have told us that at an earlier company meeting, the message from management was more direct.

"We were told that the person sitting next to us might not be with the company the next time we met," one employee said.

On Wednesday, the day before the Floyd Press article came out, the company held more meetings with employees and Sapp told pretty much the same story as the one he gave Press editor Wanda Combs. The topic of layoffs and cutbacks was not discussed.

"There was a definite change in tone," one employee said. "The threat is still hanging out there but it was more subtle this time around."

Sapp told the Press that former General Manager Gerald Gallimore laid out the "challenges" the company faced when he spoke at the last annual meeting at Floyd County High School. I attended that meeting. The picture that Gallimore painted was rosier than the one presented to employees. He talked of increasing competition and challenges but did not go into specifics and he also did not say anything about the possibility of layoffs or cutbacks in service.

Sapp blamed a drop in subscribers and long distance revenue for much of the company’s problems but interviews with Citizens employees who, for reasons that are easily understandable, ask not to be identified show other factors which have brought on the company’s current financial crisis, including:

  • Construction of a "wireless broadband" data system in the New River Valley that promised to provide customers with laptop modems speeds up to 3 mbps. Suscribers have fallen far short of expectations and some reports say Citizens is trying to find a buyer for the system.
  • IPTV, a cable-TV service delivered over the phone lines, has not met projections for county-wide deployment and does not yet offer high-definition TV reception at a time when more and more homes are getting HD TV receivers. Citizens lags a distant third in subscribers behind DirecTV and Dish Network — which offer HD services.
  • Too much rapid expansion into areas outside Floyd County and costly ventures into service beyond Citizens’ core business. The company has purchased a number of ailing cable TV franchises in other counties and has expanded into some of the most economically devastated areas of Virginia.

Citizens is an aggressive, innovative telecommunications company that provides Floyd Countians with a level of telephone and Internet services that aren’t offered in many rural areas. I have praised those services on this web site many times. These services come at a price and Floyd Countians pay for them at a rate that is higher than many other areas.

But Citizens is, first and formost, a cooperative that should be more open and honest with the subscribers/members who — in effect — own the cooperative.

Says Sapp:

In no way does Citizens or its management conceal or hide anything. Citizens has challenges it must face in today’s environment. We must continue to look to enhance efficiency and productivity…to retain the right size workforce to match the size and scope of our business.

Take a second look at what Sapp said above. Read between the lines. Then ask yourself: Is this a company that is open and honest with its customer/owners?

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