Yet More Layoffs Hit Sprint/T-Mobile, Despite Promises This Assuredly Wouldn't Happen

from the refusing-to-learn-from-experience dept

Before regulators signed off on T-Mobile's $26 billion merger with Sprint, executives like former CEO John Legere told anybody who'd listen that the merger would create oodles of new jobs from "day one." With the ink barely dry on the deal, it's abundantly clear that's not happening.

Last month, T-Mobile laid off an estimated 6,000 employees from its Metro prepaid division, layoffs that had everything to do with the merger, and nothing to do with the COVID-19 crisis. And on June 15th, hundreds of Sprint employees were unceremoniously fired as part of a six minute conference call during which nobody was allowed to ask questions:

"In a conference call on Monday lasting under six minutes, T-Mobile vice president James Kirby told hundreds of Sprint employees that their services were no longer needed. He declined to answer his employees’ questions, citing the “personal” nature of employee feedback, and ended the call."

Cool. Cool.

This was all ridiculously predictable. There's 40 years of documented US telecom history showing that the elimination of a major competitor reduces competition and raises prices (oh hi, Comcast). Global markets (Canada, Ireland) have also made this clear. Such deals almost universally result in thousands of layoffs as redundant retail, support, and management positions are culled. It's why similar deals of this type (AT&T's 2011 acquisition of T-Mobile, T-Mobile's 2014 acquisition of Sprint) were blocked. This isn't a debate topic. It's not a murky subject. Telecom consolidation routinely ends badly for employees and customers.

Economists made all of these points to the DOJ and FCC, but they were unceremoniously ignored. First by an FCC that couldn't bother to even read its own staff analysis before rubber stamping the a merger it helped cook up behind closed doors, then by a DOJ whose "antitrust" boss personally escorted the deal to fruition while ignoring all criticism.

If you go back and look at some of ex-CEO John Legere's blog posts from a few months ago (which I'm sure won't be around much longer), the CEO repeatedly promised that the merger would be "job positive" from "day one":

"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. To achieve what we’re setting out to do – become the supercharged Un-carrier that delivers new value, ignites competition and delivers nationwide real 5G for All – the New T-Mobile will provide an amazing and compelling set of services for consumers."

Legere was so breathlessly offended by statements to the contrary, he tried to insist that union officials were lying -- before reminding everybody he testified under oath about the deal's looming job explosion:

"We also keep seeing the opposition try to use projected layoff numbers from an analyst’s projections that were based on a completely different deal at a completely different point in time to discredit this merger. It’s SO bad that the head of the Communications Workers Association (CWA) was bold enough to refer to those completely unrelated numbers in a CONGRESSIONAL HEARING. I guess if the real numbers don’t tell the story you want, you can just make up new ones? It’s actually offensive. At the hearings, I raised my right hand and swore under oath to tell the TRUTH... and the truth is that the New T-Mobile will CREATE JOBS."

In the last two months alone we've seen 6,000+ non-Covid related layoffs and a 12 hour merger outage (purportedly due to merger integration headaches), so clearly everything is going swimmingly.

For T-Mobile, the COVID-19 crisis comes at an opportune time. It will allow the company to blame any layoffs on the pandemic, even if industry insiders have made it clear the layoffs were inevitable and already in the works. Meanwhile, John Legere has since sold his $17.5 million NYC penthouse in NYC To Giorgio Armani, and is likely already hard at work on his next act, during which we'll all pretend none of this ever happened. So as usual, we'll learn absolutely nothing from mergermania history, leaving us to repeat the process all over again down the lane.

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


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  1. identicon
    Anonymous Coward, 19 Jun 2020 @ 7:30am

    congress isn't worried! they've had their 'bonuses', fuck everyone else! self-serving assholes!!


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