T-Mobile US to slash 5,000 jobs due to lower-priced plans impacting expenses.
T-Mobile US to Cut 5,000 Jobs as Costs Rise in Competitive Market
T-Mobile US announced today that it will be reducing its workforce by about 7%, resulting in the elimination of 5,000 jobs in the United States. This decision comes as the wireless carrier faces increasing costs associated with acquiring more subscribers in a highly competitive market.
The carrier has been dominating the market by attracting subscribers seeking affordable plans, but this strategy has taken a toll on T-Mobile’s financials.
“What it takes to attract and retain customers is materially more expensive than it was just a few quarters ago,” stated CEO Mike Sievert in an email to employees.
The job cuts, which will occur over the next five weeks, will primarily affect corporate and back-office roles, as well as some technology positions. Retail and consumer care divisions will not be impacted.
T-Mobile anticipates incurring a pre-tax charge of approximately $450 million in the third quarter.
In July, T-Mobile projected wireless subscriber net additions between 5.6 million and 5.9 million.
Sievert also mentioned that certain areas of the business will implement more centralized models to enhance efficiency and reduce costs.
AT&T, a rival of T-Mobile, expanded its cost-cutting plan to $2 billion in July.
(Reporting by Chavi Mehta in Bengaluru; Editing by Anil D’Silva and Arun Koyyur)
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