Dear Mr. Berko: After spending 55 minutes on the phone with Verizon and being switched to four different departments, I think I got my problem solved. Then I had to call American Express and was placed on hold for probably five minutes. (The people there always keep me on hold.) Later that day, I had to fix a dispute with American Electric Power, which is my utility. The people there kept me on hold twice for over 10 minutes. This happens too often, and though this isn’t an investment question, you’re the only person I know who can tell me why this is happening.
— K.L., Columbus, Ohio
Dear K.L.: It is becoming epidemic and reminds me of my semimonthly gas station visit — with fast, efficient and courteous self-service. It’s getting worse, worser and worserer.
In 2006, American Express (AXP-$77) had 66,000 employees, helping it generate $26 billion in revenues and $3.6 billion in profits. Ten years later, AXP had only 54,000 employees but produced $32 billion in revenues and $5.1 billion in net income. Verizon Communications (VZ-$53) in 2006 had 241,000 employees helping it produce $88 billion in revenues and $6 billion in net income. Ten years later, VZ had only 170,000 employees, but it produced $127 billion in revenues and $16 billion in income. And in 2006, American Electric Power (AEP-$64) had 20,200 people on the books, producing $12.6 billion in revenues and earning $1.1 billion. Last year, AEP had only 17,400 employees but generated $15.6 billion in revenues and $1.8 billion in earnings.
The companies having higher revenues and fewer employees is why you wait so long to talk to an American Express employee if there’s a problem to fix. The same logic applies with your needing to wait (it seems like forever) to reach a VZ person on your cellphone to request a repairman to fix your landline. And the company’s ability to make more money with fewer employees is also why the AEP clerk needs three months to issue a credit to your bill. And honestly, none of these companies gives a fig.
