T-Mobile USA Inc Set to Trim 5,000 Jobs Due to Escalating Competitive Pressures: Sources

25 Aug, 2023

T-Mobile USA Inc Set to Trim 5,000 Jobs Due to Escalating Competitive Pressures: Sources

T-Mobile, a prominent telecommunications firm in the United States, has announced its intention to downsize its workforce by 7% in a strategic effort to manage costs. The move comes as the company faces increased expenditure in acquiring new subscribers within an intensely competitive market landscape.

At least 5,000 employees are expected to be affected by the impending layoffs, with reports indicating that this restructuring will impact corporate, back-office, and certain technology roles. T-Mobile's CEO, Mike Sievert, conveyed in a letter to staff that the expenses associated with attracting and retaining customers have notably escalated in recent quarters. Sievert emphasized that expanding the company's high-speed internet services and other initiatives are insufficient to meet evolving customer expectations.

Despite being the fastest-growing wireless carrier in the US, this decision by T-Mobile has taken many by surprise. This move appears to be a preemptive strategy to counteract forthcoming discounts and complimentary phone promotions during the upcoming holiday season, as highlighted in Bloomberg's analysis.

T-Mobile is positioned to capitalize on the market entry of Apple Inc.'s latest phone offerings. Media sources revealed that the company exceeded profit projections in July and raised its subscriber projection for the year. Although T-Mobile's stock experienced a modest drop of less than 1% in New York, this report contrasts with Verizon Communications Inc. and AT&T Inc., both of which reported less favorable customer growth figures.

It's noteworthy that AT&T Inc. has also been engaged in workforce reductions, eliminating approximately 74,130 employees (equivalent to 32% of its workforce) since the beginning of 2021 through June 30. Additionally, AT&T has heightened its cost-cutting objective by an additional $2 billion, targeting a total of $8 billion in savings over the next three years. This initiative is part of a larger restructuring endeavor, involving the consolidation of more than 300 offices across the nation into 9 hubs, which is anticipated to affect between 6% and 15% of its workforce totaling 156,630 employees.