Verizon, the largest mobile carrier in the country, just announced that it will shed some 10,400 jobs by the middle of 2019. Management expects that the staff reductions, as well as the adjustments that go with them, will ultimately save the firm $10 billion. Such cutbacks, especially amid an otherwise strong jobs market, speak to a fundamental upheaval at Verizon and in the rest of the communications industry, one brought by new technologies and a growing momentum in consumer and business demands. The pattern is clearly one that the economist Joseph Schumpeter would place under the heading “creative destruction.” It will continue, not just for Verizon but for other firms in the industry as well. This changing communications environment has even begun to upend policy debate in Washington on net neutrality.

About 8,000 of those leaving Verizon chose to do so in response to a voluntary buyout deal. Last September, management sent the offer to some 44,000 employees, about a third of its entire workforce. Each worker who agreed would get three weeks’ pay for each year of his or her service up to 60 weeks, as well as bonuses and benefits. Some 2,400 more of these announced staff reductions reflect a management decision to transfer employees to the Indian outsourcing giant, Infosys, as part of a $700 million agreement. These employees, if they refused transfer, were not eligible for the severance package.

The new 5G or “fifth generation” mobile technology lies behind much of this. In part, it is an outright boon to Verizon and others in the industry. It will enable much higher data transmission speeds to mobile devises, something absolutely essential to meet the demands of consumers, both retail and business.  But because 5G lacks the range of the still dominant 4G technology, it will require a huge investment in transmission towers, “mini towers,” as they are termed in Verizon communications.  Much of that money will come from the saved salary and other costs alluded to in the announcement. The cuts lie in three areas where Verizon sees the dimmest growth opportunities.