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Some 40,000 Verizon Communications Inc. (NYSE: VZ) union employees are walking off the job after contract negotiations between two labor unions and Verizon failed. Negotiations with the Communications Workers of America and the International Brotherhood of Electrical Workers have been ongoing since August, and union employees have worked without a contract ever since.

Verizon currently employs 177,700 employees as of its last annual report, which makes this walkout an enormous 23% of its entire workforce. Verizon wants to freeze pensions and make it easier to get rid of workers. It also wants to hire more non-union labor, which it may very well end up doing soon as there are now 40,000 vacancies on its payroll.

Why is Verizon pushing back now? The company’s debt load is not the issue. Verizon does carry a spectacular debt of $110 billion, leveraging it at over 50%, but 81% of that is fixed rate, and a full percentage increase in interest rates would only add $200 million to its debt service costs annually. Nor is it a current overrun in employment costs either, as total employee benefit obligations were below $30 billion in 2015, down from $33 billion in 2014.

A deeper look into its pension plan shows that the answer is probably a combination of Obamacare and retiring baby boomers.

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