5,000 T-Mobile Employees Lost Their Jobs Post-Merger While Ex-CEO John Legere Saw A $137 Million Golden Parachute
from the uncarrier-no-more dept
To be clear, former T-Mobile CEO John Legere did some amazing things with T-Mobile. After regulators blocked AT&T from acquiring T-Mobile in 2011 (which wound up being a very good thing), he took the $3 billion break up fee and turned an also-ran into a major thorn in the side of AT&T and Verizon. Legere accomplished this by (gasp) generally treating consumers well, eliminating annoyances like long-term contracts, sneaky fees, and many other telecom industry mainstays. He also did it by embracing an entertaining, wise ass persona in an industry not known for having a sense of humor.
But then, T-Mobile owners Deutsche Telekom decided it would be a good idea to throw all of this away by pursuing a $26 billion merger with Sprint. That suddenly forced Legere into a position where he had to behave exactly like the companies he’d just spent a decade making fun of. That included lying a lot about the benefits of the deal as the company tried to sell the Trump administration on the competition and job-eroding megadeal (that wound up not being particularly difficult, since the industry-allied Trump FCC and DOJ didn’t care about hard data).
Technically, Legere only worked for three months in 2020, but nabbed a $137 million exit package according to new data:
“Legere’s 2020 compensation was revealed yesterday in a filing with the Securities and Exchange Commission (see pages 49 and 50). Legere was previously paid $27.8 million in the full year of 2019 and $66.5 million in 2018, mostly in the form of stock awards. His 2020 compensation of $137.2 million did not include any stock awards?instead, it consisted of a $136.55 million severance payment, $600,000 in salary, and $50,000 in reimbursement for legal fees.”
Legere certainly had a comfy exit, also offloading his $17.5 million Central Park West apartment to Giorgio Armani on his way out of town.
Of course, you’re supposed to ignore (and most of the US press certainly will) the fact that Legere repeatedly promised in print that the Sprint merger would result in a massive surge in new jobs. That never happens in the wake of telecom consolidation, and soon enough, the company was busy laying off 5,000 employees. Unions and Wall Street analysts predict the layoffs could get as high as 15-30,000 as redundant positions are inevitably eliminated over the next few years.
Of course, there was always ample evidence that Legere’s brash, pink high-top wearing trash talking persona was more caricature than reality. After all, Legere supported the FCC’s decision to lobotomize its consumer protection authority, opposed net neutrality, and mocked the EFF when they pointed out the company was lying. But the mask really slipped during the merger sales pitch, which not only involved lying constantly about the benefits of the deal, but hiring Trump ally Corey Lewandowski, and throwing cash at Trump’s DC hotel to improve merger approval chances.
Given the Sprint merger reduced US wireless sector competition by 25%, and the FCC currently has its hands tied behind its back due to the net neutrality repeal, which T-Mobile supported (which again neutered most FCC authority, not just net neutrality rules), it’s inevitable that investors now pressure T-Mobile to behave more and more like AT&T and Verizon over the next few years. That means more empty promises, more efforts to nickel-and-dime subscribers, and a steadily eroding effort to seriously compete on price. All the stuff Legere repeatedly insisted he was opposed to. That’s not speculation or opinion, it’s what happens every time a country decides to give a middle finger to competition by allowing mindless consolidation in telecom. There are 40 years of indisputable evidence.
Again, Legere deserves all the praise in the world for turning T-Mobile into a heavyweight champion in wireless. But at the same time, he also deserves ample criticism for the ease in which he was willing to throw all of that in the toilet, and the grotesque amount of falsehoods and Trump ass kissing that accompanied the effort along the way.