T-Mobile US is slashing 5,000 jobs on the heels of the telecommunication company's management touting the carrier’s outsized success.
In an email to T-Mobile US employees, which was also included in a Securities and Exchange Commission (SEC) filing on the job cuts, CEO Mike Sievert explained the approximately 5,000 employees being let go represent around 7% of the carrier’s total employee base at the telecom operator.
Sievert wrote that those people losing their jobs would be notified over the next five weeks and come “primarily in corporate and back-office, and some technology roles.”
“Impacted roles are primarily duplicative to other roles, or may be aligned to systems or processes that are changing, or may not fit with our current company priorities,” Sievert further explained. “Some areas of the business will be implementing more centralized models where they can improve efficiency and effectiveness and save costs. We’re also taking opportunities to build bigger, broader people manager roles with deeper spans and fewer layers, to provide longer-term growth opportunities. At the same time, we’ll also be decreasing our reliance and spend on external workers and resources.”
The executive added that, “after this process is complete, I do not envision any additional widespread company reductions again in the foreseeable future.”
Sievert laid the blame for the job cuts at the feet of the telecom carrier’s recent success, which have put the carrier “at a pivotal crossroads.”
“What it takes to attract and retain customers is materially more expensive than it was just a few quarters ago,” Sievert noted. “We’ve been out-running this trend by accelerating merger synergies, and building our high-speed internet business faster than expected, and out-performing in a few other areas. However, it is clear that doing everything we are doing and just doing it faster is not enough to deliver on these changing customer expectations going forward.”
Sievert touted the carrier’s success during its most recent earnings call, where he proclaimed the operator attracted the most postpaid phone net additions for the second quarter over the past eight years.
T-Mobile US CFO Peter Osvaldik added during the call that the carrier was increasing its customer growth forecast for the full year, with “our focus on profitable growth allows us to fund those higher customer net adds” while still being able to increase its earnings before interest, taxes, depreciation and amortization (EBITDA) expectations by 10% compared to the previous year.
However, company revenues did slide sequentially and were down 2.2% through the first six months of 2023 as compared to the first half of 2022.
What about the promised telecom job growth?T-Mobile US ended last year with approximately 71,000 employees, which was 4,000 less employees than it counted when it started 2022. The carrier is also sitting well below the approximately 80,000 employees it counted when it acquired Sprint in early 2020.
More significant is that the latest T-Mobile US job cuts continue to sink the carrier’s ability to fulfill a pre-Sprint acquisition – and should be noted a pre-pandemic – rallying point that it would be a net job creator.
“This merger is all about creating new, high-quality, high-paying jobs, and the new T-Mobile will be jobs-positive from day one and every day thereafter,” then CEO John Legere wrote in a blog post in early 2019. “That’s not just a promise. That’s not just a commitment. It’s a fact.”
Legere then went on to state where those new jobs would come from, before proclaiming the carrier would have “more than 11,000 additional employees on our payroll by 2024.” However, he did couch that stat by adding these “more” employees would be as compared to the combined number of employees at a separate T-Mobile US and Sprint. This last part highlighted proponents of the deal stating that the carriers needed to be combined in order to prosper.
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