The company said increased competition in its wireless business, along with rising costs of gaining new customers in new markets, had stymied its expansion plans.
"Our strategy consistently has been to focus on profitable growth, not growth at any cost," said GTE CEO Charles Lee, in a prepared statement.
The company had expected to grow its revenue from national sales of telephone service and its wireless division by 10 to 12 percent this year, Lee noted. After cutting back its expansion effort, this figure is instead likely to be in the "high single digits," he said.
GTE will continue to invest in higher growth areas, such as data services. The company also will renew its push into new markets once its pending merger with Bell Atlantic is complete, he added.
"We have made proactive decisions to sacrifice short-term revenue growth for short- and long-term earnings growth, even as we work to complete our merger," Lee said.
The company still plans to increase its earnings per share by 13 to 15 percent overall this year, executives said.
Details on the cost-cutting effort will be released later this quarter. The initiative would include cuts in the number of employees and contractors, primarily through attrition and other voluntary efforts, the company said.
The merger between Bell Atlantic and GTE, which offers local telephone service in 28 states, is currently under review by the Federal Communications Commission. Regulators have expressed some worry that the merger, combined with the similar deal between SBC Communications and Ameritech, would put nearly two-thirds of local U.S. phone lines under the control of the two companies.
GTE's stock closed today up 5.37 to 67.875, in a day marked by strong gains across the telecommunications sector. The company plans to report fourth quarter earnings on Jan. 28.