T-Mobile Employees Want Promises They Won't Be Fired Post Merger

from the good-luck-with-that dept

We've noted repeatedly how the Sprint, T-Mobile merger isn't great. There's forty years of history showing how telecom industry megamergers almost always result in less competition, higher prices, and fewer jobs, and this deal is no exception. Eliminating one of just four US wireless carriers is likely to result in higher prices (see: Canada or Ireland). And Wall Street analysts not only predict the deal could eliminate anywhere between 10,000 and 30,000 jobs, data suggests the consolidation could result in employees across the sector making less money even if they work at other companies.

Of course if you ask T-Mobile and Sprint executives, they'll tell you that none of this will actually happen. They'll tell you that the deal will somehow create more competition and jobs, despite (again) history showing that this rarely, if ever happens and such deals almost exclusively benefit executives and shareholders.

Hoping for a little reassurance, T-Mobile employees this week penned a letter to Deutsche Telekom CEO Tim Hoettges (Deutsche Telekom has a majority stake in T-Mobile) asking for guarantees they won't see layoffs and pay cuts in the wake of the deal:

"T-Mobile US retail employees and technicians delivered a letter late Tuesday for Deutsche Telekom CEO Tim Hoettges, seeking assurances that their jobs and paychecks will be safe if the wireless carrier is allowed to merge with Sprint, its smaller rival.

T-Mobile Workers United, with about 500 members and backed by the Communications Workers of America and the German union ver.di, urged Hoettges to “make solid and verifiable” assurances that jobs will be safe, paychecks will not shrink and management will not interfere in union activities."

These workers shouldn't hold their breath.

From Comcast to AT&T, telecom merger after telecom merger begins with a laundry list of promises that nothing whatsoever will change and if things do change, it will only be for the better. Then, everything changes as redundant retail support, and executive positions are inevitably eliminated. It's a finely oiled machine you could set your watch to, yet each time a new merger is proposed the press collectively nods dumbly as if pre-merger guarantees mean much of anything, and government doesn't have a multi-generational history of failing to hold companies accountable when they blatantly ignore merger conditions.

It's a problem that's particularly pronounced in the telecom sector, where tens of thousands of jobs are being lost due to mindless consolidation and a mantra of "growth for growth's sake." Saturated growth in fixed and mobile broadband has driven companies to mergers in the hopes of attaining growth, but as AT&T's Time Warner and DirecTV acquisitions or Frontier's gobbling up of aging phone lines have made clear, being bigger doesn't magically equate to being better. In fact it's usually the opposite as even bigger, debt-saddled companies fail to scale customer service to handle the growth.

Why the US seems incapable of learning from history on this subject is a question for the ages. Right Now, T-Mobile is telling regulators that the merger will magically create thousands of new jobs. It's also promising to keep both Sprint's Overland Park, Kansas and T-Mobile's Bellevue, Washington headquarters both intact. All while we see zero negative impact and increased competition despite fewer overall competitors. History has repeatedly shown such claims to be little more than fluff and nonsense, yet regulators at both the FCC and DOJ (both not coincidentally now run by former telecom lawyers) are happy to believe the promises.

Filed Under: consolidation, employees, jobs, mergers
Companies: sprint, t-mobile


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  • icon
    That One Guy (profile), 6 Sep 2019 @ 4:25am

    Shooting a little low there

    They should ask for a unicorn and a solid gold mansion each while they're at it, as both would be just as likely to be upheld as a promise of 'no layoffs or paycuts post-merger'.

    reply to this | link to this | view in chronology ]

  • icon
    GS (profile), 6 Sep 2019 @ 6:30am

    I would stop holding my breath and start getting my resume together.

    reply to this | link to this | view in chronology ]

    • This comment has been flagged by the community. Click here to show it
      identicon
      The EYE OF DORIAN is upon you!, 6 Sep 2019 @ 9:44am

      Re: "GS", the weird account going back to 2015 first page...

      two year gap no 2017, is back with a one-liner already, apparently going to ramp up like others and pretend entirely normal.

      Hasn't responded to my prior poke. Of course any answer would give me another bit of info, so the zombies never do respond -- that's how I know they're zombies!

      So may be yet another taken over by a minion for astro-turfing.

      reply to this | link to this | view in chronology ]

      • identicon
        urza9814, 6 Sep 2019 @ 12:39pm

        Re: Re: "GS", the weird account going back to 2015 first page...

        "Hasn't responded to my prior poke. Of course any answer would give me another bit of info, so the zombies never do respond -- that's how I know they're zombies!"

        Is there a way to actually get notified of replies? I keep giving TD my email address but I've never gotten a single email from them...

        reply to this | link to this | view in chronology ]

        • icon
          That One Guy (profile), 7 Sep 2019 @ 3:57am

          Re: Re: Re: "GS", the weird account going back to 2015 first pag

          Have you been filing in the email field in the reply window and checking the 'Email me when there are new comments on this thread' box just above the Submit button?

          reply to this | link to this | view in chronology ]

          • identicon
            urza9814, 9 Sep 2019 @ 7:03am

            Re: Re: Re: Re: "GS", the weird account going back to 2015 first

            The only box to check is "Subscribe to the Techdirt Daily newsletter"...

            reply to this | link to this | view in chronology ]

        • icon
          PaulT (profile), 8 Sep 2019 @ 4:31am

          Re: Re: Re: "GS", the weird account going back to 2015 first pag

          Do you tick the email me box as well as fill in the email field? Also check spam filers. I've never had a thread not notify me, as evidenced by the years old threads I occasionally see

          reply to this | link to this | view in chronology ]

  • icon
    PaulT (profile), 6 Sep 2019 @ 6:33am

    Yeah, that's not the way this works. Mergers always mean layoffs, because ultimately you're duplicating infrastructure. When that's resolved, you don't need the same amount of staff to run it. So, people are laid off. Management will probably find some way to try and pretend the eventual layoffs aren't related to the merger, of course, but they're inevitable.

    I've been through this a few times personally. It's always the same - lots of management speak about how the staff are the most important to the business and nobody's going to lose their jobs - right up until someone turns up with HR to tell the team to clear their desks. Sometimes, the companies even grow at the time they're doing this so they can point as numbers going up, but some individuals, or even departments, will be cut.

    If they believe there's any likelihood their job is in danger, these people need to stop asking for empty promises and start brushing up their skills for the new job. Hold off to see if you are actually in the firing line or if there's likely to be a tasty severance package, but definitely get prepared.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 6 Sep 2019 @ 8:26am

      Re: posturing

      +1

      yup, mergers and consolidations are routine in the business world.
      That's how you get leaner more efficient production -- which generally means lower costs and lower prices to consumers (if there is market competition).

      NOBODY has a permanent lifetime job guarantee/wages (except tenured academic professors). These ISP union workers are just posturing -- same as their corporate bosses.

      Basic long term problem here (as we all know) is lack of real competition in this ISP sector.
      Most everybody sees that regulation has failed, but few understand why. Truth is painful to many, while constantly venting about the problem somehow seems a preferable alternative.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 7 Sep 2019 @ 6:42am

        Re: Re: posturing

        "mergers and consolidations are routine in the business world.
        That's how you get leaner more efficient production"

        • I do not believe that is the driving force behind most mergers.

        "NOBODY has a permanent lifetime job guarantee/wages"

        • Except the Elite Ruling Class

        "Most everybody sees that regulation has failed, but few understand why."

        • Do tell.

        "Truth is painful to many, while constantly venting about the problem somehow seems a preferable alternative."

        • Well - lets have it.

        reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 7 Sep 2019 @ 7:18am

        Re: Re: posturing

        Basic long term problem here (as we all know) is lack of real competition in this ISP sector.

        No, the real problem is the bad service and high prices. Competition is what we hope will fix it, but more realistically will be the difference between 2 or 4 oligopolists. Regulation has failed in the USA, because it's been set up to fail—what can one expect, when regulators accept the telco claims that telling customers the real prices ahead of time is too much of a burden?

        That's not to say regulation has produced utopias elsewhere, but I'll take a heavily-regulated duopoly over the barely-regulated American quadropoly.

        reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 8 Sep 2019 @ 9:34pm

        Re: Re: posturing

        Most everybody sees that regulation has failed, but few understand why

        ...What regulation, though? Title II is dead. The industry keeps asking for investment handouts that don't materialize. Rural areas continue to have non-existent coverage and even the FCC itself has no fucking idea what the broadband access landscape is like. And all we have to go on is Ajit Pai saying that everything is fine, please give them more money. Exactly what would less regulation accomplish here?

        NOBODY has a permanent lifetime job guarantee/wages (except tenured academic professors)

        Ah, this old "Who moved my cheese" chestnut again. I get that taking a dump on workers and painting them as lazy slobs who refuse to adapt is the in thing, but outside of your personal emotional high from kicking someone when he's down, what are you contributing outside of a "hurr durr, lookit these idiots daring to be emotional about shitty corporate decisions" comment?

        while constantly venting about the problem somehow seems a preferable alternative

        And rounding off the bingo sheet with a "Let them eat cake" remark, fantastic.

        "Pull yourself by the bootstraps" is an argument that has failed in many places. South Korea. Hong Kong. Telling people that "no job/career lasts forever" is meaningless when the top 1% are constantly cushioned from consequence and rewarded for fucking over everyone else. Is the T-Mobile employee demand a stunt? Arguably so. Is it going to change the minds of their superiors? Hell probably not. But do you think a "okay, I'll lube my own ass on the way out" approach is going to improve anything?

        reply to this | link to this | view in chronology ]

        • icon
          PaulT (profile), 9 Sep 2019 @ 12:16am

          Re: Re: Re: posturing

          "...What regulation, though?"

          The regulation that was written by industry lobbyists. I can't imagine why that wasn't effective at curbing their bad behaviour...

          reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 6 Sep 2019 @ 7:43am

    as if the promise, even if given, will mean anything! i mean, none of the telephone/mobile phone/broadband companies ever tell any lies, do they!!

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 6 Sep 2019 @ 7:52am

    A company I worked for got a promise of "no layoffs or management/operational changes for a year" when they were purchased. The agreement actually held up, surprisingly. But I bet you can guess what started happening on day 366...

    reply to this | link to this | view in chronology ]

  • identicon
    Baron von Robber, 6 Sep 2019 @ 8:10am

    They can promise you won't be fire. Being laid off on the other hand...
    I just can't think of a merger in the last 40 years....ok anytime a merger didn't result in somebody being laid off.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 6 Sep 2019 @ 9:30am

      Re:

      They can promise you won't be fire. Being laid off on the other hand...

      They can also promise this won't happen. Just remember that telco promises aren't worth shit.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 6 Sep 2019 @ 2:51pm

        Re: Re:

        t mobile employees need to empower themselves and each other AND WALK OUT, then the merger won't mean shit.

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 7 Sep 2019 @ 6:58am

          Re: Re: Re:

          Easy to say, but employees that were in a position to quit wouldn't be asking for promises they won't be laid off. Realistically, T-Mobile employees walking out would just mean T-Mobile could fire them without severance and replace them with their Sprint counterparts. The article says the union covers 500 employees; the two companies have about 80,000 total.

          reply to this | link to this | view in chronology ]

          • icon
            PaulT (profile), 8 Sep 2019 @ 4:34am

            Re: Re: Re: Re:

            Which is why they keep getting away with it. Especially in the US, where your family's medical care us so often also tied to your employer.

            reply to this | link to this | view in chronology ]

  • icon
    ECA (profile), 6 Sep 2019 @ 9:31am

    How many

    How many of you were around with the Start of the consolidation of Grocery stores and other retail???

    Lets..
    Cut Extra workers.
    Cut hours
    No one is Full time
    Find a reason to make things Hard so they QUIT, not laid off/fired and get unemployment..

    Then lets close the smaller stores.
    Create 1 big store, Over There, someplace. 10-20 miles away and make a HUGE store with everything.. and only 2 times the employee's as the smaller local stores..
    NOW lets close ALL those Smaller stores..

    Less?
    Utility costs.
    Rents/lease/ownership of land they can now sell for profit.
    Less Property insurance
    Less Employee's
    Less Managers
    Less upkeep and maintenance..
    NO stores made before 1990 with Lots of problems.

    50-100 stores closed...figure 300 employee's each..
    30000+(Im aiming very low) unemployed and you hired NEW at the big store.

    PS.. there are 2-3 Major corps that OWN them all...They are no longer Independent, Competitive, or anything else that is Part of capitalism..
    Small companies were Bought and Stripped and CLOSED..

    Now we walk into a store and cant find any help,and its worse after 5pm, as all the dept heads get to go home.

    PS...
    Even your local Pharmacies are being bought...How and why?? easy... To get lower prices..
    NON UNION..

    reply to this | link to this | view in chronology ]

    • This comment has been flagged by the community. Click here to show it
      identicon
      The EYE OF DORIAN is upon you!, 6 Sep 2019 @ 9:48am

      Re: -- "ECA" has been doing exact same schtick 12 years!

      The truly random capitals (unlike mine which emphasize), the incomprehensible gibberish, the fact that NO ONE has been able to maintain a conversation with this "account", and everyone seems to have given up.

      Weirdest site on teh internets! A continuing MARVEL.

      reply to this | link to this | view in chronology ]

      • icon
        PaulT (profile), 8 Sep 2019 @ 4:25am

        Re: Re: -- "ECA" has been doing exact same schtick 12 years!

        You're using whether someone types gibberish and has valuable conversations as a point of criticism? You? Wow...

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 8 Sep 2019 @ 8:43pm

          Re: Re: Re:

          There's not much criterion for a profile blue won't shit on. Low amounts of activity? He'll dump on it. High amounts of activity? He'll dump on that too. Maybe it's time we reminded blue of his /slash punctuation phase/...

          reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 6 Sep 2019 @ 11:24am

      Re: How many

      Just curious... do you disdain using markdown for some reason? Why not use bold for emphasis instead of all caps?

      I mean yeah, you've a full history of doing this kinda thing. So... why?

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 6 Sep 2019 @ 2:54pm

      Re: How many

      PLUS NOW that big store is no longer selling AMMO.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 6 Sep 2019 @ 9:52am

    Ha!
    Good luck with that. Even the union (and all of their collected dues) can't prevent you from being let go after a merger.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 6 Sep 2019 @ 12:09pm

    It's not a layoff

    The corporate world is already pretty damn adept at doing regular layoffs/firings while spinning it as something positive for everyone... Companies like Intel, Philips Semiconductor, Intuit, Wells Fargo, etc, all have resources dedicated to handling these things on a yearly (or more frequent) basis... just because they use some cheerful euphemism for it, doesn't mean they don't do firings/layoffs....

    Expect T-Mobile to handle this in a similar fashion... but don't call it a layoff, because that's mean :p

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 6 Sep 2019 @ 2:58pm

      Re: It's not a layoff

      They will have some beautiful woman's corporate butch voice explaining how this is good for the economy and good for the company and good for everyone who wants to be productive in today's society!

      reply to this | link to this | view in chronology ]


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