T-Mobile Promised Its Megamerger Would Create Jobs. It Laid Off 5,000 Workers Instead

Time after time, telecom mergers fail to deliver promised benefits. But America doesn’t seem interested in learning from the experience.
March 1, 2021, 6:58pm
T-Mobile storefront.
Image: Alexi Rosenfeld/Getty Images

Two years ago, as T-Mobile was busy ramping up spending at Donald Trump’s DC hotel to gain approval for its $26 billion megamerger with Sprint, the company told anybody who’d listen that the heavily-criticized deal would result in massive job creation at the company. 

In a 2019 blog post still available on the company’s website, former T-Mobile CEO John Legere proclaimed that the merger would be “jobs-positive from day one and every day thereafter.” “That’s not just a commitment, it’s a fact,” Legere said.

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“The overall plan is for the larger company to employ more staff than the two previous companies put together," the company said in a separate 2018 statement.

But at the same time, unions, economists, and Wall Street experts were warning that the deal would not only reduce competition and raise rates, it was likely to, over time, contribute to anywhere between 10,000 and 30,000 job losses as redundant positions were eliminated.  

The critics, so far, have been proven right.

Documents filed last week with the SEC, first spotted by telecom trade mag Light Reading, indicate T-Mobile has eliminated roughly 5,000 positions in just the two years since the deal was approved. The number could be higher; last April, insiders say T-Mobile announced 6,000 layoffs at the company’s Metro prepaid division that were not related to Covid.

Last June, hundreds more Sprint employees were fired during a conference call that lasted all of six minutes. T-Mobile did not respond to a request from Motherboard for comment.

Consumer groups say it’s part of a relentless pattern, particularly pronounced in sectors like telecom, where corporations promise a universe of merger benefits, only for those benefits to never materialize. It’s incredibly rare for US regulators to retroactively punish companies, or even acknowledge these policy failures in hindsight. 

“The lesson here, again, is to not believe a single promise made by companies planning to merge,” Tim Karr, CEO of consumer group Free Press, said of the latest revelations. “It's always and only about further limiting consumer choice while giving the c-suite executives and their bankers massive payouts upon completion of the deal.”

As layoffs have mounted, T-Mobile revenues have grown. Light Reading notes that T-Mobile was making about $650,000 per employee in 2015. By last year, that number was $912,000. Meanwhile, experts warn that countries that allow four-to-three consolidation in wireless (like Ireland and Canada) inevitably see higher rates due to less competition

Under trash-talking ex-CEO John Legere, T-Mobile cultivated a brand reputation for being a consumer friendly-alternative to traditional wireless carriers. At the same time, the company engaged in union busting, supported the attacks on net neutrality, ridiculed consumer groups like the EFF, and hired Trump campaign manager Corey Lewandowski as a consultant. 

In his 2019 blog post, Legere accused unions and other critics of lying about the merger’s looming employment impact, promising that the company would create nearly 5,600 new American customer care jobs by 2021. Those jobs never arrived. 

“I guess if the real numbers don’t tell the story you want, you can just make up new ones?” Legere complained. “It’s actually offensive.” 

Legere left the company shortly after the deal was completed, offloading his Central Park West Penthouse to Giorgio Armani for $17.5 million. Meanwhile, consumers and employees will be left footing the bill for repeated promises that never materialized.