T-Mobile Promised Major Job Growth Post Sprint Merger. SEC Filings Show The Exact Opposite Happened
from the Charlie-Brown-and-Lucy-Football dept
When T-Mobile was selling its $26 billion Sprint merger to regulators, it told anybody who’d listen that the deal would create a parade of new jobs. In a 2019 blog post that still hasn’t been deleted (amateur move, guys), ex-T-Mobile CEO John Legere didn’t mince words in his predictions:
“So, let me be really clear on this increasingly important topic. 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. That?s not just a promise. That?s not just a commitment. It?s a fact.”
“…These combined efforts will create nearly 5,600 new American customer care jobs by 2021.”
2021 is here, and a recent SEC filing shows that the company has actually lost about 5,000 jobs in a little under a year and a half. That number could potentially be even higher. As noted last April, T-Mobile quickly set about immediately shuttering its Metro prepaid division (a decision that had nothing to do with COVID), resulting in an estimated 6,000 layoffs (something T-Mobile said wouldn’t happen). Last June, the company fired hundreds of additional Sprint employees during a conference call that lasted all of six minutes.
There’s likely more where that came from, as the company is still operating dual headquarters in both the Pacific Northwest and Overland Park, Kansas. In most mergers like this, the acquiring company tries to keep things the same for about a year to keep folks calm before the hatchets are unveiled.
Of course, this is all something that consumer groups, antitrust experts, unions, and even Wall Street stock jocks predicted. Most of those folks predicted that, even though it would take time, the deal would eliminate anywhere between 10,000 and 30,000 jobs. That’s in addition to their complaints that the deal effectively reduced US wireless competition by 25% via 4-3 carrier consolidation, something that historically always, sooner or later, results in higher prices for consumers (see: Canada, Ireland, Germany).
Granted in his original blog post, Legere made fun of those critics and insisted they were simply making shit up:
“I guess if the real numbers don?t tell the story you want, you can just make up new ones? It?s actually offensive.”
Yes, accurate predictions are so offensive. Granted John Legere, who successfully built T-Mobile from an also-ran into a major competitor (thanks in part to regulators blocking AT&T’s 2011 merger with T-Mobile), was quick to leave the company shortly after the deal, offloading his Central Park West Penthouse to Giorgio Armani for $17.5 million (how many employee jobs is that?). And as Light Reading notes, T-Mobile’s revenues continue to soar as it continues job cuts it promised wouldn’t happen:
“In 2015, T-Mobile was making about $650,000 per employee. Last year, it generated almost $912,000. For workers at the company, that is not a source of comfort.”
Granted this happens absolutely every time there’s a major telecom merger. Companies throw out bullshit job growth claims, knowing full well such consolidation inevitably will result in massive job cuts a year or two later as redundant positions are eliminated. The press hypes the false merger “synergy” claims, then (usually) can’t be bothered to follow up with reports highlighting how the promises were empty. It’s a massive ouroboros of dysfunction, and no matter how many times we live through the exact same experience (AT&T’s countless mergers, Verizon’s countless mergers, Comcast’s repeated mergers), America has a severe allergy to learning absolutely anything from experience.
Mindless consolidation and “growth for growth’s sake” hurts employees, markets, and consumers. Full stop. Regulators could have forced Sprint to find another suitor, preferably one that didn’t result in a loss of overall competitors (Dish, Comcast, Charter, Google, Amazon). Instead we signed off on another massive deal, based on a parade of false promises. Then, in two or three years when US wireless prices (already some of the highest in the developed world) are even higher, everybody will stand around with a dumb look on their faces wondering how exactly we got this point. Wash, rinse, repeat.