T-Mobile conducts layoffs as it prepares to complete Sprint merger
T-Mobile “has laid off a number of employees” in its prepaid business, Light Reading reported yesterday. Light Reading said three sources confirmed layoffs in the Metro by T-Mobile prepaid business, but “the extent of the layoffs is unclear.” We contacted T-Mobile about the reported layoffs and will update this article if we get a response.
A federal judge approved T-Mobile’s $26 billion acquisition of rival Sprint about two weeks ago, rejecting a lawsuit by 13 state attorneys general who warned that the merger will reduce competition in the wireless telecommunications market and harm consumers with higher prices.
New York Attorney General Letitia James decided not to appeal the ruling, and the merging firms say they expect to be one company by April 1. California telecom regulators still have not approved the deal, a potential factor that could delay the merger closing.
Union predicts big post-merger job cuts
It’s not clear if the Metro by T-Mobile layoffs are related to the impending merger, but the Communications Workers of America (CWA) union expects more layoffs after the merger is completed. The union said this month that the merger approval “will put 30,000 jobs at risk.”
“Wall Street analysts project that the merger will result in massive job cuts from the elimination of duplicative retail stores,” the CWA wrote in an analysis it conducted earlier. “When pressed on the issue at a Senate hearing [in June 2018], T-Mobile CEO John Legere conceded that ‘there’ll be a rationalization of jobs in the first year’—a corporate-speak admission that the merged company plans to lay off thousands of workers.”
The CWA analysis identified 11,800 prepaid jobs at T-Mobile and Sprint that could be eliminated, along with 13,700 jobs in the companies’ postpaid businesses and another 4,500 at their headquarters. The analysis was conducted before the merger plan was altered to divest Sprint’s prepaid business to Dish Network, which could limit job cuts.
“T-Mobile’s January 2018 acquisition of iWireless, a regional carrier in Iowa, shows what happens to jobs when T-Mobile takes over,” the CWA said. “The company closed more than 72 percent of iWireless corporate stores and more than 93 percent of authorized dealer stores. T-Mobile also shuttered iWireless customer call centers in Des Moines and Cedar Rapids, Iowa.” T-Mobile and Sprint “both have long track records of offshoring US jobs,” the union said.
Independent stores could be hit hard
T-Mobile had about 53,000 part- and full-time employees at the end of 2019, up from 52,000 the previous year. Sprint had nearly 29,000 employees at the beginning of 2019 but doesn’t seem to have released an updated figure since then.
Sprint claimed in a Securities and Exchange Commission filing that “[i]n year one, [the merged company] will have more than 3,500 additional full-time US employees than the standalone companies would have had, and 11,000 more people by 2024. Additionally, plans to build more than 600 new retail locations and five new customer experience centers will create approximately 12,000 more jobs—many in small towns.”
But many T-Mobile and Sprint phone stores are operated independently from the companies, and jobs at those stores could be lost. Analyses by the CWA and another industry group include expected job losses at stores that would close.
“[W]hile both companies may be able to keep their promise not to trim any of their own staff, many phone stores are staffed independently—which could mean layoffs in the range of 24,000, said Adam Wolf, president of the National Wireless Independent Dealer Association, which represents owners of phone stores,” an NBC News report said this month.
Corporate promises to add jobs are often just talk. AT&T promised to create thousands of jobs with a tax break, but instead it eliminated more than 37,000 jobs since the tax cut took effect in 2018.