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T-Mobile to lay off 5,000 workers

New York

T-Mobile on Thursday announced it plans to lay off 5,000 employees, or around 7% of its total staff, over the next five weeks.

The reductions will largely affect corporate and back-office jobs that are “primarily duplicative” to other roles and will reduce the company’s middle management layers, CEO Mike Sievert said in a letter to employees Thursday. The company also plans to reduce its spending on “external workers and resources,” but its retail and “consumer care” staff who work directly with customers will not be affected, he said.

“What it takes to attract and retain customers is materially more expensive than it was just a few quarters ago,” Sievert said.

T-Mobile’s cuts comes after months of mass layoff announcements at a range of other technology companies — including Microsoft and Meta — as firms grapple with an uncertain economic environment.

In its most recent quarterly earnings report last month, T-Mobile reported sales down 2.5% year-over-year and net customer additions fell slightly from the same period in the prior year, although it posted record low customer churn and profit growth. T-Mobile’s stock has fallen more than 7% since last August. Shares were trading down around 1% following its layoff announcement.

In Thursday’s letter, Sievert said that in the three years since closing T-Mobile’s acquisition of rival carrier Sprint, it has been working to streamline the combined businesses and accelerate the build-out of its high-speed internet business. However, he suggested it was important for the company to now narrow its focus.

“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,” he said. “Today’s changes are all about getting us efficiently focused on a finite set of winning strategies.”

T-Mobile plans to notify employees who will be laid off by the end of September. The company estimates it will incur a pre-tax charge of $450 million in the September quarter related to the reductions, according to a Thursday securities filing.

Affected employees will receive “competitive severance packages” based on tenure, as well as accelerated stock vesting, access to career transition services and other benefits, Sievert told employees. He added that the company is not planning additional, widespread employee reductions in the foreseeable future.