Update: T-Mobile USA has revised its estimates on the net number of job cuts. It will still eliminate 900 positions, but an upcoming round of hiring will bring the net job losses to just 350.
T-Mobile USA is handing pink slips to
900 more employees in its second round of layoffs since March, when its CEO
warned that more cuts could be in store.
The workforce reductions will help lower
expenses as the operator embarks on a costly turnaround effort that will
overhaul its network and re-launch its brand.
“While difficult choices had to be
made, restructuring our organization will help us better respond to market and
customer demands,” T-Mobile said in a statement, confirming an earlier
report by The Verge, which published a memo from CEO Philipp Humm listing additional layoffs.
Some positions will be eliminated and
others will be outsourced, offsetting the addition of new employees in growth
areas like its enterprise segment and sales force, where it has added 1,000 new
The layoffs announced three months ago
closed seven call centers and eliminated a net 1,900 jobs.
T-Mobile’s workforce shrunk nearly 12
percent during the past year, according to the most recent earnings statement
from parent company Deutsche Telekom. At the end of March, it employed about
32,000 people, so the latest reductions are estimated to eliminate just under 3
percent of its current U.S. workforce.
T-Mobile said the cuts are necessary to
focus its resources on returning the company to growth after a long string of
The company has hired Ericsson and Nokia Siemens Networks to build a new network that will replace its legacy equipment and install LTE
at 37,000 cell sites nationwide. The $4 billion project is currently under way
and T-Mobile expects its LTE service to go live next year.
T-Mobile has long marketed its HSPA+
service as offering “4G speeds,” but its LTE launch will still come
much later than other top-tier operators, namely Verizon Wireless, which
already have substantial footprints of the next-generation mobile broadband
Adding to its competitive disadvantages
is the fact that it still does not offer the iPhone, which is sold at rivals
AT&T, Verizon Wireless and Sprint. It has said the changes to its network
will make its service more “compatible” with the popular device and
estimates more than 1 million unlocked iPhones currently use its network.
T-Mobile lost 510,000 contract customers
during the first quarter. The declines in its postpaid base were offset by the
addition of prepaid subscribers, machine-to-machine connections and MVNO
customers, resulting in a net addition of 187,000 customers.