Crown Castle to cut 10% jobs, slashes Capex

Telecommunications infrastructure company Crown Castle said it will reduce its workforce by 10 percent as a result of an operational review of its fiber business.
Crown Castle telecom towers
The US-based telecom tower company aims at driving approximately $100 million of annualized run-rate operating cost savings from the job cut.

Last year, the company had initiated a restructuring plan which included reducing total headcount by 15 percent.

Crown Castle, which operates more than 40,000 cell towers, said discretionary capital expenditures are expected to be $1.2 billion to $1.3 billion in 2024, including approximately $1.1 billion in the Fiber segment and $180 million in the Towers segment.

Crown Castle had initiated a strategic and operating review of its fiber business, which made up about 32 percent of the company’s revenue in the quarter ended Mar. 31, in December last year after reaching a deal with activist investor Elliott Investment Management.

Elliott Investment Management, which disclosed a $2 billion stake in the company in November, had been pushing Crown Castle to consider selling the fiber business. As part of the deal, Crown Castle also replaced two board directors, Reuters news report said.

The Houston, Texas-based company said it expects to reduce gross capital expenditures at its fiber segment by $275 million to $325 million in 2024 and expects annual organic revenue growth of about 3 percent in the fiber solutions segment beginning in 2025.

Crown Castle has identified opportunities for enterprise fiber and small cell demand from locations that are on or close to the company’s existing fiber footprint in the U.S. Crown Castle runs 90,000 route miles of fiber in 48 of the top 50 most populated cities in the U.S.

There will be a reduction of 3,000 to 5,000 revenue-generating small cell nodes in 2024 and a reduction in leasing activity of approximately $15 million in the year. Crown Castle said there is sufficient demand to grow small cell revenues by double digits.

Crown Castle said there will be an opportunity in small cells to increase the number of collocation nodes and increase returns on anchor nodes by focusing on locations nearer to its existing network. Crown Castle will reduce the capital intensity of small cell projects by narrowing its investment focus to concentrate on a higher mix of collocations and building network-adjacent anchor nodes.

It also plans to concentrate on areas close to its existing networks and increase its focus on specific wireless projects.

The company said while it has concluded its operational review, the strategic review of the business is remains underway.

Crown Castle revised the midpoint of its 2024 net income forecast to about $1.16 billion, compared to the previous midpoint of $1.25 billion.

Crown Castle co-founder and former CEO Ted Miller, who now runs investment fund Boots Capital, said in February the company could fetch as much as $15 billion by selling its fiber assets.

Crown Castle CEO Steven Moskowitz said: “With these changes, we are pursuing a more focused sales effort to target on-net and near-net demand and, critically, increasing return thresholds on all new growth opportunities to drive a more efficient use of capital.”