T-Mobile Slashes 1,900 Jobs, AT&T Blames Failed Merger
By Jennifer LeClaire / CIO Today. Updated March 26, 2012.
In a move many industry watchers expected after the failed AT&T merger, T-Mobile is cutting jobs. However, the wireless carrier is perhaps shedding a larger number than some hoped, as it moves to consolidate its call center operations from 24 to 17 facilities by the end of June.
Call centers scheduled for closure are in Allentown, Pa.; Fort Lauderdale, Fla.; Frisco and Brownsville, Texas; Lenexa, Kan.; Thornton, Colo.; and Redmond, Ore. Altogether, T-Mobile said, it will shed 1,900 jobs. T-Mobile employs about 3,300 people at the seven facilities.
"Concentrating call centers is an important step to achieve competitive cost structures to successfully compete as challenger and value player in the wireless market," said Philipp Humm, CEO and president of T-Mobile. "These are not easy steps to take, but they are necessary to realize efficiency in order to invest for growth."
T-Mobile to Rehire 1,400
If there is a silver lining to the 3,300 jobs lost at the closed centers, T-Mobile said it would begin hiring immediately at its other 17 call centers and expects to bring on as many as 1,400 new call center operators to keep up with customer demand. T-Mobile is inviting employees from the seven closing facilities to transfer to another location.
T-Mobile said affected call centers will remain open for the next three months and employees can continue working. Employees who choose not to transfer (with relocation assistance) from the company will be offered transition packages that include severance pay and outplacement support.
T-Mobile is setting up on-site career centers at all seven facilities to provide employees with a personal career coach and access to job search training, tools and technologies. T-Mobile also plans to pay for two months of continued health care coverage for eligible employees who elect COBRA benefits.
"A merger with AT&T likely would have consolidated the call centers, so the layoffs were likely regardless," said Rob Enderle, principal analyst at the Enderle Group. "Mergers like this generally have large layoffs to eliminate redundant services and it is as likely the layoffs would have been even deeper had the merger been approved."
Would AT&T Have Saved the Jobs?
AT&T, of course, disagrees and took the opportunity to blast the Federal Communications Commission for squashing the $39 billion acquisition. Jim Cicconi, AT&T's senior executive vice president of External and Legislative Affairs, pointed out that AT&T had promised to preserve those same call centers and jobs if the merger was approved. AT&T also predicted that if the merger failed, T-Mobile would be forced into major layoffs.
As Cicconi sees it, this is a reminder of why "regulatory humility" should be more than a slogan. The FCC may consider itself an expert agency on telecom, he said, but it is not omniscient. When it ventures far afield from technical issues and into judgments about employment or predictions about business decisions, it has often been wrong, Cicconi said.
"The other lesson is even more important, and should be sobering. It is a reminder that in government, as in life, decisions have consequences," he said. "One must approach them not as an exercise of power but instead of responsibility, because, as I learned in my years of public service, the price of a bad decision is too often paid by someone else."