T-Mobile, the wireless carrier, has announced plans to reduce its workforce by 7%, resulting in the elimination of approximately 5,000 jobs. CEO Michael Sievert shared this information with employees via email, stating that the layoffs will take place over the next five weeks and will primarily affect employees in corporate, back-office, and certain technology positions. However, retail and customer service teams will not be affected by these cuts. Sievert acknowledged that this is a significant change for the company and assured employees that additional large-scale reductions are not anticipated in the foreseeable future.
The job cuts are expected to result in a pre-tax charge of around $450 million for T-Mobile in the third quarter. Laid-off employees will be provided with severance payments based on their tenure, a minimum of 60 days of transition leave, career transition services, and other benefits, according to the announcement.
T-Mobile’s decision to downsize follows similar actions taken by several technology companies, including Google, Meta, Amazon, and Microsoft, which have implemented mass job cuts in the past year. Layoffs have also impacted employees in various sectors such as Disney parks, newspapers, and higher education.
Sievert explained that the affected T-Mobile positions are either redundant or do not align with the company’s current changes and priorities. He emphasized the increasing costs associated with attracting and retaining customers. The restructuring aims to streamline T-Mobile’s operations and focus on a set of winning strategies. Sievert later emphasized the need for the company to keep pace with technology advancements and meet customer demands by utilizing artificial intelligence and other tools.
In the second quarter, T-Mobile reported a profit of $2.22 billion, a significant improvement compared to a loss of $108 million reported during the same period in 2022. The company also achieved total service revenues of $15.74 billion. T-Mobile solidified its position as one of the largest cellphone service carriers in the United States in 2020 following the acquisition of rival company Sprint. Additionally, T-Mobile announced its plan to acquire Mint Mobile, partly owned by actor Ryan Reynolds, for a cash-and-stock deal worth up to $1.35 billion in May, further expanding its presence.
On Thursday, T-Mobile shares experienced a 2% decline in afternoon trading.
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