Thousands of T-Mobile employees are losing their jobs as part of layoffs that the wireless carrier says will boost efficiency and help it continue to compete in its sector.
The layoffs, announced Thursday in an email by CEO Mike Sievert, will leave T-Mobile’s workforce with nearly 5,000 workers less than it has now. They will take place over the coming five weeks, with the company expected to finish informing all those affected by the end of next month, according to the email made available on the Securities and Exchange Commission (SEC) website.
T-Mobile said corporate and “back-office” positions will bear the brunt of the headcount reduction, plus some technology-related ones. Those getting laid off have jobs that are “primarily duplicative to other roles, or may be aligned to systems or processes that are changing, or may not fit with our current company priorities,” Sievert wrote.
“The retail and consumer care experts who take care of our customers will not be impacted,” the CEO told employees in his message.
A total of more than 71,000 people worked for T-Mobile on a full-time or part-time basis at the end of 2022, according to the wireless carrier’s most recent annual report. The almost 5,000 employees getting laid off represent about 7% of that total headcount.
“Today’s changes are all about getting us efficiently focused on a finite set of winning strategies, so that we can continue to out-pace our competitors and have the financial capability to deliver a differentiated network and customer experience to a continually growing customer base, while simultaneously meeting our obligations to our shareholders,” Sievert said in his email.
He also said customer demands “are higher than ever,” something he partly credited to the “added competition we brought due to our merger and historic network build.” T-Mobile and Sprint combined a few years ago in a deal worth $26.5 billion.
“What it takes to attract and retain customers is materially more expensive than it was just a few quarters ago,” he went on to say.
Sievert later said that T-Mobile “do[es] not envision making additional large-scale reductions across the company again in the foreseeable future.”
The company said it will give workers who are losing their jobs in the layoffs “competitive severance payments based on tenure” and an “additional 60 days minimum of transition leave.”
That includes “pay and benefits, plus accelerated vesting of their next stock vest, continuation of tuition reimbursement benefits, career transition services, and a new T-Mobile alumni service discount good for life,” according to Sievert’s message. They will also get “privileged access” to hiring for open jobs at the company “now and in the future.”
The job cuts will bring T-Mobile an accompanying pre-tax charge worth roughly $450 million, the company said in an SEC filing. That charge will fall within the third quarter.
T-Mobile also stood by its guidance for the year.
The wireless carrier has projected its core adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) would hit the $28.9 billion to $29.2 billion range. Its postpaid net customer additions, meanwhile, will land in between $5.6 million and $5.9 million.
T-Mobile upped its predictions for both of those metrics in late July, when it put out its second-quarter financial results.
The company’s stock price as of Thursday afternoon has experienced a nearly 2% drop from where it opened in the morning.