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.

Filed Under: competition, jobs, layoffs, mergers
Companies: sprint, t-mobile


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  • identicon
    Anonymous Coward, 4 Mar 2020 @ 6:36am

    When bad behavior is excused bad behavior becomes the norm.

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

  • identicon
    Eric, 4 Mar 2020 @ 6:43am

    Color me

    F'ing surprised.

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

  • icon
    Michael Long (profile), 4 Mar 2020 @ 6:47am

    It's not really like we can do much about it. The people at the top proposing the mergers are doing it to make even more money. The people in government approving the mergers came from the industries they're "regulating" and will return there to reap their rewards once they've served their function.

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

    • icon
      Scary Devil Monastery (profile), 4 Mar 2020 @ 6:58am

      Re:

      "It's not really like we can do much about it."

      All too many americans will actively fight any legislation regulating corporations. And when the victims of corporate overreach keep going all-out to defend the rights of their abusers to keep beating them, it gets real tricky to implement a fix.

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

      • icon
        Michael Long (profile), 4 Mar 2020 @ 3:33pm

        Re: Re:

        Because, you know, Capitalism!!!

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

        • identicon
          Anonymous Coward, 5 Mar 2020 @ 2:31am

          Re: Re: Re:

          Hardley, more like a reverse fascism. In Fascism, the government tell corporations what to do, in the US, corporations tell the government what to do.

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

        • icon
          Scary Devil Monastery (profile), 5 Mar 2020 @ 3:30am

          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.

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

        • identicon
          Anonymous Coward, 6 Mar 2020 @ 3:03am

          Re: Re: Re:

          Move to a socialist country.

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

  • icon
    aerinai (profile), 4 Mar 2020 @ 7:12am

    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?

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

    • identicon
      Anonymous Coward, 4 Mar 2020 @ 10:25am

      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.

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

  • identicon
    Iggy, 4 Mar 2020 @ 7:39am

    So when do the unlimited data plans start going away?

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

    • identicon
      Anonymous Coward, 4 Mar 2020 @ 3:34pm

      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.

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

  • identicon
    Anonymous Coward, 4 Mar 2020 @ 7:49am

    You mean Richard Bennett lied? Again?

    Someone bring my fainting couch!

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

  • identicon
    Anonymous Coward, 4 Mar 2020 @ 10:50am

    absolutely gobsmacked! you mean those who warned this would happen were actually right?

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

  • identicon
    Anonymous Coward, 4 Mar 2020 @ 10:51am

    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.

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

    • identicon
      Real News, 5 Mar 2020 @ 6:27am

      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.

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


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