T-Mobile Promised Major Job Growth Post Sprint Merger. SEC Filings Show The Exact Opposite Happened
from the Charlie-Brown-and-Lucy-Football dept
When T-Mobile was selling its $26 billion Sprint merger to regulators, it told anybody who’d listen that the deal would create a parade of new jobs. In a 2019 blog post that still hasn’t been deleted (amateur move, guys), ex-T-Mobile CEO John Legere didn’t mince words in his predictions:
“So, let me be really clear on this increasingly important topic. This merger is all about creating new, high-quality, high-paying jobs, and the New T-Mobile will be jobs-positive from Day One and every day thereafter. That?s not just a promise. That?s not just a commitment. It?s a fact.”
“…These combined efforts will create nearly 5,600 new American customer care jobs by 2021.”
2021 is here, and a recent SEC filing shows that the company has actually lost about 5,000 jobs in a little under a year and a half. That number could potentially be even higher. As noted last April, T-Mobile quickly set about immediately shuttering its Metro prepaid division (a decision that had nothing to do with COVID), resulting in an estimated 6,000 layoffs (something T-Mobile said wouldn’t happen). Last June, the company fired hundreds of additional Sprint employees during a conference call that lasted all of six minutes.
There’s likely more where that came from, as the company is still operating dual headquarters in both the Pacific Northwest and Overland Park, Kansas. In most mergers like this, the acquiring company tries to keep things the same for about a year to keep folks calm before the hatchets are unveiled.
Of course, this is all something that consumer groups, antitrust experts, unions, and even Wall Street stock jocks predicted. Most of those folks predicted that, even though it would take time, the deal would eliminate anywhere between 10,000 and 30,000 jobs. That’s in addition to their complaints that the deal effectively reduced US wireless competition by 25% via 4-3 carrier consolidation, something that historically always, sooner or later, results in higher prices for consumers (see: Canada, Ireland, Germany).
Granted in his original blog post, Legere made fun of those critics and insisted they were simply making shit up:
“I guess if the real numbers don?t tell the story you want, you can just make up new ones? It?s actually offensive.”
Yes, accurate predictions are so offensive. Granted John Legere, who successfully built T-Mobile from an also-ran into a major competitor (thanks in part to regulators blocking AT&T’s 2011 merger with T-Mobile), was quick to leave the company shortly after the deal, offloading his Central Park West Penthouse to Giorgio Armani for $17.5 million (how many employee jobs is that?). And as Light Reading notes, T-Mobile’s revenues continue to soar as it continues job cuts it promised wouldn’t happen:
“In 2015, T-Mobile was making about $650,000 per employee. Last year, it generated almost $912,000. For workers at the company, that is not a source of comfort.”
Granted this happens absolutely every time there’s a major telecom merger. Companies throw out bullshit job growth claims, knowing full well such consolidation inevitably will result in massive job cuts a year or two later as redundant positions are eliminated. The press hypes the false merger “synergy” claims, then (usually) can’t be bothered to follow up with reports highlighting how the promises were empty. It’s a massive ouroboros of dysfunction, and no matter how many times we live through the exact same experience (AT&T’s countless mergers, Verizon’s countless mergers, Comcast’s repeated mergers), America has a severe allergy to learning absolutely anything from experience.
Mindless consolidation and “growth for growth’s sake” hurts employees, markets, and consumers. Full stop. Regulators could have forced Sprint to find another suitor, preferably one that didn’t result in a loss of overall competitors (Dish, Comcast, Charter, Google, Amazon). Instead we signed off on another massive deal, based on a parade of false promises. Then, in two or three years when US wireless prices (already some of the highest in the developed world) are even higher, everybody will stand around with a dumb look on their faces wondering how exactly we got this point. Wash, rinse, repeat.
Filed Under: competition, hiring, jobs, john legere, lies, merger, mobile service
Companies: sprint, t-mobile
Comments on “T-Mobile Promised Major Job Growth Post Sprint Merger. SEC Filings Show The Exact Opposite Happened”
Karl, you and especially Mike need to stop with this lie that the T-Mobile/Sprint merger is sooner or later going to result in higher prices for consumers….
IT. HAS. ALREADY. HAPPENED.
All telecom mergers result in 1000,s of lost jobs.
plus reduced competition and higher prices for consumers .
in ireland we have 3 mobile companys,
plus 2 mvno mobile services
i think theres plenty of competition.
they offer competing price plans plus fast 4g service ,
i get 30meg per second service on 4g.
i have the choice of at least 3 fast broadband providers using fibre or phone line installation.
for 18 dollars per month i get 800 gig mobile data ,plus unlimited free phone calls to any other network.
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so,
you can move over here, where we have let capitalism go amuck, and fix this?
And can I add, ALL Mergers, consolidate. It dont matter the business. This has been shown over All the years Companies and corps have done business.
Who ever thought anything Stated about MORE jobs, More advances, Improved services, is STUPID as a Rock.(and thats being Real nice)
Isnt it fun that Everyone knows whats going to happen, Including the companies involved, BUT THE GOV. thought otherwise? or did someone Fill up a few pockets.
And AC,
I would love to know how well they keep up the services over there, Cause over here, they dont do much of anything except cash the checks.
Placebo effect
You don’t need to throw "mindless" into the mix. The whole point of consolidation is to increase efficiency and decrease competition. Efficiency increases mainly affect cost not scaling with the customer base, like research and development. For large companies in established markets, those are dwarved by the per-customer costs and returns. The per-customer costs and returns in turn are dominated by market expectations and competitive pressure.
Reducing competitors means to gain control over market expectations, not least of all by being able to effectively control the narrative without being contradicted by competitors.
And of course if you can generate customer satisfaction by controlling the narrative rather than changing the customer experience, this is vastly more effective once you have a customer base so large that it becomes cheaper to invest in media coverage and politicians rather than delivery of actual value to the customer.
And if you tell the customer you are catering wonderfully to their needs, they will believe it to some manner and think that moving elsewhere will not buy them anything. That’s the placebo effect. Of course, it’s even better if they don’t have the option of moving elsewhere in the first place.
All this is not surprising, it’s just putting 2&2 together and it shouldn’t take a marketing degree to get it. But even bad and transparent make-believe works: this is why so many political smear campaigns and stuff like "Stop the Steal" work to shift balances in spite of openly available counterproof.
And as the politics of the last few years have clearly demonstrated, you don’t even need to cover your mud-slinging operation if you just do it at large enough scale. You can do it openly and will still reap a net gain.
That is the magic of marketing. Your stories do not need to pan out to make it into wide circulation. They just need to get repeated often enough.
And the consolidation lie is really profitable.
What?
I’ll take, "Things that make you say, ‘DUH!’" for $1000, Alex.
They ALWAYS do. It ALWAYS doesn’t.
You might have noted that the predictions regarding job increases were made prior to the Covid pandemic, but I guess that doesn’t fit your narrative.
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And how exactly did Covid affect their day to day operations?
I mean its not like people are now using their phones & wireless internet more during this… oh wait.
Please show your work.
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If we were talking about cinemas, you would have a point, but not when talking about one of the industries that has seen growth in demand due to covid.
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They started shedding jobs well before covid. Better luck next time.
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The argument was that they claimed they would increase jobs. He neglected to state that the pandemic might have caused an issue in hiring new people. It has in every other industry so why would they be different?
It is a flaw in his rant, that’s all.
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Well, just what kind of natural disaster would it have taken then to match their promises? COVID-19 already did cause a huge unprecedented and unpredicted surge in need for telecommuting.
I am starting to think those in charge of making sure they keep their word are secretly masochists who get off every time Lucy pulls the football away.
job growth from a merger?
Who would be dumb enough to expect job growth from a merger??? Companies merge to reduce headcount, not to increase.
Re: job growth from a merger?
I’m not sure anyone actually is dumb enough to actually fall for that, it’s just the politicians don’t care so long as the ‘donations’ keep coming in and the ‘press’ are just happy to print whatever someone hands them so they don’t have to do any of that bothersome ‘investigation’ or ‘fact-checking’.
And this is why all mergers and acquisitions should be outlawed. Every company should be forced to stand or fall completely on its own.