Right On Cue, Post-Merger T-Mobile Layoffs Begin

from the round-and-round-we-go dept

US courts and regulators recently rubber stamped the T-Mobile Sprint merger, ignoring forty years of history showing how US telecom megamergers almost always result in less competition, higher prices, and fewer jobs. Eliminating one of just four US wireless carriers is likely to result in higher prices (see: Canada or Ireland). Wall Street analysts and unions alike predict the deal could eliminate anywhere between 10,000 and 30,000 jobs, and data suggests the consolidation could result in employees across the sector making less money even if they work at other companies.

Like most mergers, T-Mobile and Sprint executives have spent a year telling people none of this will actually happen and critics were being hyperbolic. Executives like John Legere (whose leaving in April and thus won’t have to bear witness to his own handiwork) insisted repeatedly that the competition-eroding deal would somehow increase competition and create thousands of new, high paying jobs. Real world analysis from numerous experts never supported that, and early returns on those promises aren’t looking so hot.

Light Reading late last week reported that with the ink not even dry on the merger, the company was already starting to trim jobs at one of its prepaid phone divisions, Metro:

“According to three people familiar with the company, T-Mobile has laid off a number of employees within its Metro by T-Mobile prepaid business. The extent of the layoffs is unclear. The company couldn’t immediately provide a response to questions from Light Reading on the topic.

T-Mobile did not respond to repeated requests from me for comment on the nature of the layoffs. Neither would the company respond to inquiries made by other outlets like Ars Technica or Fierce Wireless. That suggests to me these layoffs were indeed merger related, since T-Mobile could have simply stated that the departures were scheduled pre-merger, assuming that was true.

Peter Adderton, founder of prepaid wireless provider Boost Mobile, was backing the deal just a few months ago. His tone has now completely shifted, and he noted that a lot of these laid off employees were informed of the layoffs during an impersonal conference call:

Like most US telecom mergers, around 4% of the journalists that uncritically hyped this merger’s “synergies” will go back in a few years and scrutinize the company’s pre-merger promises. And all of the think tankers and analysts that rubber stamped the deal uncritically will go mute in a few years when the price hikes and additional retail and middle management layoffs arrive, pretending they had some other, mysterious origins. This is, apparently, just how we do things in America, a country that seems habitually incapable of learning much of anything from history or experience.

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Companies: sprint, t-mobile

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Comments on “Right On Cue, Post-Merger T-Mobile Layoffs Begin”

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Scary Devil Monastery (profile) says:

Re: Re: Re: Re:

"Because, you know, Capitalism!!!"

Which has always confused me. Capitalism needs, as absolute necessity, a level playing field in order to work. Otherwise the concept of "competition" and "consumer choice" go right out the window.

And the US, for some time now, has had a marketplace which would have Adam Smith warding it off with a crucifix while backing away slowly.

Frankly speaking, China – ostensibly a "socialist" "republic"…’scuse me for laughing… – does way better in being a land of market opportunity and self-made men. Assemble the wealthiest chinese in a room and toss a rock, half of the time you hit someone who started out fighting other kids in the gutter for scraps to eat.

The US no longer boasts that claim much. The 1% almost invariably come from established clans and networks. Competition has become that ugly word the US market fears so much that most lobby groups are centered entirely around ways to ensure it can be avoided.

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aerinai (profile) says:

Thats it, I'm Switching Carriers!

Screw T-Mobile, I’m gonna go to Verizon and show them! …wait, i switched from Verizon because they were tracking me on the internet with super cookies a few years back (and probably still are). Fine, I’ll go to AT&T! … wait, they work closely with the NSA to circumvent my constitutional protections… Fine, I’ll go with…out a mobile phone?

Anonymous Coward says:

Re: Thats it, I'm Switching Carriers!

This comment hit home for me… I’ve been thinking i might switch back to Verizon because their coverage is better where i live, but I have always despised Verizon… and now with T-Mobile going downhill, I feel like I will have to switch once the new phones are paid off and unlocked.

This comment has been deemed insightful by the community.
Anonymous Coward says:

Re: Re:

You never really had Unlimited to begin with. Always been a lie. Speed slows down when you hit the Invisible wall. Depending on where you are, what towers are used, could be sooner than later. It may be unlimited, but it’s to slow to even pick up some e-mail, it’s so slow as to be useless. But it’s still Unlimited.

Anonymous Coward says:

In other news, AT&T is about to lay off hundreds and implement a "billions" cost-saving strategy within the company.

The point?

Mergers and acquisitions don’t mean jack if companies are still laying off people despite the "lack" of competition.

Curiously missing, this news in relation this merger is going to hurt jobs from a competitor.

Real News says:

Re: Re:

Telecom has been laying off people for more than 15 years. The advances in technology from the network, back office billing systems, automated intelligent call routing… the list goes on and on. Sprint had 110K employees when it merged with Nextel. Sprint now has around 28K. Sprint buying and merging with Nextel did not kill jobs. The improved technology and the ability to do more for customers with less people has driven the reduction. T-mobile merging with Sprint will also combine spectrum that both companies will be able to use to provide a nice network product. One of the products will be home and business internet service. This could produce an whole new revenue stream and division at the new tmo. Sprint will have to sell Boost. An Iconic brand name and all of its employees will go to Dish and their new wireless division. This is will probably be called a layoff from the merger, but it is up to Dish to hire, fire or keep those new employees. I think Dish will bring in a third party and create a larger prepaid company in their wirless division and eventually post paid customers as well as use the new wireless spectrum to update their satellite services.

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