Verizon Communications Inc. notified employees in Washington and surrounding areas last week that it will buy out or lay off 665 employees by July.

Verizon, the nation's largest telecommunications company, employs 30,700 people in the Potomac region, which includes Washington, Maryland, Virginia and West Virginia.

An e-mail dated April 9 from the employee communications division of Verizon's domestic telecom group said the company's traditional business selling local telephone service has been shrinking in the past two years.

"In 2002, we lost 272,732 lines. In the past year, lines have declined by about 2.8 percent across the three states and the District of Columbia," the e-mail said. "Line loss will continue for the foreseeable future."

Verizon spokesman Harry J. Mitchell said that "it's a very tough industry now" and that Verizon is "fighting to remain successful" in the face of competition from other local phone carriers and the wireless industry. He said that in the District, there are more wireless lines from various companies than Verizon has land lines, as more people are substituting their residential land-line service with cellular phones.

In September 2002, Verizon made a similar announcement, saying it had 1,000 more employees than necessary, but all of those employees left voluntarily, so there were no layoffs, Mitchell said.

Separately, Verizon started marketing its long-distance and Internet services in Maryland and Washington, where it previously could not sell because of regulatory restrictions. Verizon is trying to gain more local business and residential customers by marketing a bundle of services, including local, long-distance and wireless phone service and high-speed Internet access.