T-Mobile announced on Thursday that it plans to reduce its workforce by just under 7%. In a letter addressed to employees, the CEO cited the high cost of retaining customers as the reason behind this decision.
Aug. 24 (UPI) — Mike Sievert, the CEO of T-Mobile, revealed that the company will be streamlining operations by reducing the number of employees. Sievert mentioned, “Starting this week, and over the next five weeks, we will be making changes to our organization that will result in the reduction of some positions at the company. These shifts will impact close to 5,000 positions, a little under 7% of our total employees in locations across the country, primarily in corporate and back-office, and some technology roles.”
The letter was included in a filing with the Securities and Exchange Commission on Thursday. The company anticipates a $450 million decrease in revenue for the third quarter due to the workforce reduction.
This announcement comes shortly after T-Mobile’s plans to create more jobs with the opening of twelve new retail outlets in North Carolina, adding at least 100 positions.
T-Mobile reported a net income of $2.2 billion in the second quarter, surpassing the $1.9 billion earned in the previous quarter. However, the company experienced a loss in the second quarter of 2022.
During this period, T-Mobile saw an increase of 1.75% in its customer base compared to the first quarter of this year and a 5.4% rise since the second quarter of the previous year.
The CEO stated, “What it takes to attract and retain customers is materially more expensive than it was just a few quarters ago.” He reassured that retail and customer-service roles would not be affected by these layoffs.
As of 11:50 a.m. EDT, T-Mobile’s shares on the NASDAQ (TMUS) were down by approximately 2.5%, trading near $134 per share.
In other news, there was a decrease of 10,000 in weekly unemployment claims; however, the data may be skewed due to the nearly 4,000 new claims filed by residents in fire-ravaged Hawaii.
