New York, 24 Aug, 2023 (GNP): T-Mobile has recently revealed its intention to undertake a significant workforce reduction, resulting in the layoff of approximately 5,000 employees, which corresponds to around 7% of its overall workforce, over the next five weeks.
This decision comes as the company aims to streamline its operations and adapt to the evolving economic landscape.
Primarily targeted at corporate and back-office roles, this move seeks to eliminate positions that are deemed redundant or duplicative. CEO Mike Sievert conveyed in an email to employees that the company also intends to reduce its expenditures for “external workers and resources.”
Notably, the retail and “consumer care” employees who engage directly with customers won’t be impacted, he said.
Also Read: KIA automobiles face price hike
The backdrop for these changes is the company’s recognition of the rising costs associated with customer acquisition and retention. Sievert explained that the expenses involved in these areas have notably escalated over recent quarters.
T-Mobile’s decision to downsize aligns with a trend observed across the technology sector, with companies like Microsoft and Meta having previously announced significant layoffs due to the uncertain economic landscape.
In the company’s most recent quarterly report, T-Mobile reported a 2.5% decline in sales year-over-year, accompanied by a modest decrease in net customer additions compared to the same period the previous year.
Also Read: Dell to layoff over 6500 workers
Despite these challenges, the company managed to achieve record low customer churn and witnessed profit growth. However, the stock performance has faced headwinds, with shares declining over 7% since last August.
Sievert highlighted T-Mobile’s efforts to streamline operations and expedite the expansion of its high-speed internet business following the acquisition of Sprint.
Impacted employees will be offered competitive severance packages based on their tenure, along with accelerated stock vesting and access to career transition services. Sievert assured employees that there are no plans for further widespread workforce reductions in the foreseeable future.
