T-Mobile Layoffs: 5,000 People Cut, Company Won't Be 'Faceless or Heartless'

T-Mobile layoffs will impact 7% of its U.S. workforce over the next five weeks, according to an announcement from the company’s CEO.

Mike Sievert, CEO of the magenta “un-carrier,” on Thursday filed with the U.S. Securities and Exchange Commission (SEC) a letter he sent to T-Mobile employees. In that letter, Sievert writes that the Washington state-based company will cut almost 5,000 jobs, with a focus on corporate and back office. Cuts will also include “some technology roles,” Sievert said. On the other hand, retail and consumer care personnel will see no impact, Sievert said.

T-Mobile’s Mike Sievert

According to Sievert, the cost of customer acquisition and retention has materially risen in the last few quarters. Sales decreased 2.5% year-over-year in T-Mobile’s latest earnings. Net customer additions also fell. The company can’t make the investments it needs to differentiate its network and customer experience and at the same time meet “obligations to our shareholders,” Sievert wrote.

“We’ve been out-running this trend by accelerating merger synergies, and building our high-speed internet business faster than expected, and outperforming in a few other areas,” Sievert wrote. “However, it is clear that doing everything we are doing and just doing it faster is not enough to deliver on these changing customer expectations going forward.”

Those Impacted by T-Mobile Layoffs

Sievert said the T-Mobile layoffs primarily target “duplicative” roles or jobs that no longer align with “company priorities.” He said he doesn’t expect more widespread cuts in the “foreseeable future.” In a comment that might be relevant to the indirect sales channel, Sievert wrote that T-Mobile will decrease its reliance on “external workers and resources.”

“… I want this to be a better place to work for every employee going forward. We can be smarter, faster, and even better at competing by streamlining our operating model and structure to reduce the complexity. You have my commitment that our organization will create more individual empowerment and faster decision-making over time. This is about re-prioritizing our work and doing it differently, not about foisting more work on fewer people. And it is about optimizing every dollar, so it can be used to deliver a better network, a better value, and a better experience for our customers,” Sievert wrote.

He promised “competitive” severance tied to tenure along with minimum 60 days of transition leave. Other compensation from the T-Mobile layoffs includes career transition services, tuition reimbursement benefits and a discount for T-Mobile alumni. Pre-tax charges related to the layoffs will add up to around $450 million in the company’s third quarter. He added that they will receive “privileged access” for appropriate T-Mobile roles in the future. Notifications will start this week and likely finish by the end of September, Sievert said.

“This is a bit of a longer time frame because we want to ensure we treat every one of our people with respect and personal support. We have zero intention of being a faceless – or heartless – company in a situation that is already difficult,” he wrote.

Sievert on Aug. 10 and Aug. 11 sold 40,000 shares of T-Mobile stock, according to an SEC filing. That adds up to more than $5.5 million.