T-Mobile to lay off 5,000 workers – Business


New York
CNN

T-Mobile announced Thursday that it plans to lay off 5,000 employees, or about 7% of its total workforce, over the next five weeks.

The cuts will mainly affect corporate and back-office jobs that are “primarily duplicative” of other roles and will reduce the company’s middle management levels, CEO Mike Sievert said. the letter Thursday to staff. The company plans to reduce its spending on “outsourced staff and resources,” but its retail and “consumer care” employees who work directly with customers will not be affected, he said.

“What it takes to attract and retain customers is materially more expensive than it was just a few quarters ago,” says Sievert.

T-Mobile’s cuts come months after a range of other technology companies — including Microsoft and Meta — announced months of layoffs as the companies grapple with an uncertain economic environment.

In its most recent quarterly earnings report last month, T-Mobile reported that sales fell 2.5% year-over-year and net subscriber additions were down slightly from the same period a year earlier, though it posted record low the buyer churn and increase profits. T-Mobile’s stock has fallen more than 7% since then Last August. Shares were trading down about 1% after the layoff announcement.

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In Thursday’s letter, Sievert said that in the three years since it closed its acquisition of T-Mobile by rival carrier Sprint, it is working to streamline the combined businesses and accelerate the build-out of its high-speed Internet business. However, he suggested that it was important for the company to narrow its focus now.

“It’s clear that doing what we’re doing and doing it faster isn’t enough to keep up with these changing customer expectations going forward,” he said. “Today’s changes are to focus our expertise on a limited set of winning strategies.”

T-Mobile plans to notify the laid off workers in late September. The company estimates it will incur a $450 million pre-tax charge in the September quarter related to the reduction, according to Thursday’s securities filing.

Affected employees will receive “competitive severance packages” based on tenure, as well as accelerated stock vesting, access to career transition services and other benefits, Sievert told employees. He added that the company is not planning additional, widespread employee reductions in the near future.

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