T-Mobile US CEO Mike Sievert (pictured) told employees it planned to cut almost 7 per cent of its workforce in an effort to streamline its operating model.
A Securities and Exchange Commission filing revealed Sievert informed staff of the plan in an email, explaining the cuts will affect close to 5,000 positions, primarily across corporate and back-office roles, along with some technology jobs.
It plans to begin laying off staff this week and over the next five weeks.
“The retail and consumer care experts who take care of our customers will not be impacted,” Sievert stated.
“After this process is complete, I do not envision any additional widespread company reductions again in the foreseeable future.”
He noted the cuts are primarily duplicate roles, or those which “may be aligned to systems or processes that are changing or may not fit with our current company priorities”.
Rumours of job cuts have circulated for several weeks on Thelayoff.com.
Investment platform Macrotrends stated T-Mobile had 71,000 employees at end-2022, down 5.3 per cent from 2021.
While T-Mobile has recently been more successful than AT&T and Verizon at attracting new phone customers, those additions have been costly.
“What it takes to attract and retain customers is materially more expensive than it was just a few quarters ago,” Sievert wrote.
He added the company has been outrunning the subscriber cost trend with the help of accelerated synergies with Sprint, along with the fast deployment of its home broadband service.
T-Mobile estimated it will incur a pre-tax charge of about $450 million in the current quarter due to the cuts, but reiterated its full-year guidance.
Recon Analytics analyst Roger Entner told Mobile World Live the lay offs are part of the hidden cost of T-Mobile’s customer acquisition strategy, adding the operator is able to reduce staff numbers due to an aggressive move into network virtualisation and deploying a standalone 5G core.
Network virtualisation includes large elements of automation, which has led to job cuts across the industry.
Entner noted T-Mobile was around 9,000 staff behind those goals even before the latest announcement.