US courts and regulators recently rubber stamped the T-Mobile Sprint merger, ignoring forty years of history showing how US telecom megamergers almost always result in less competition, higher prices, and fewer jobs. Eliminating one of just four US wireless carriers is likely to result in higher prices (see: Canada or Ireland). Wall Street analysts and unions alike predict the deal could eliminate anywhere between 10,000 and 30,000 jobs, and data suggests the consolidation could result in employees across the sector making less money even if they work at other companies.
Like most mergers, T-Mobile and Sprint executives have spent a year telling people none of this will actually happen and critics were being hyperbolic. Executives like John Legere insisted repeatedly that the competition-eroding deal would somehow increase competition and create thousands of new, high paying jobs. Early returns on those promises aren’t looking so hot.
Light Reading late last week reported that with the ink not even dry on the merger, the company was already starting to trim jobs at one of its prepaid phone divisions, Metro:
“According to three people familiar with the company, T-Mobile has laid off a number of employees within its Metro by T-Mobile prepaid business. The extent of the layoffs is unclear. The company couldn’t immediately provide a response to questions from Light Reading on the topic.
T-Mobile did not respond to repeated requests from me for comment on the nature of the layoffs. Neither would the company respond to inquiries made by other outlets like Ars Technica or Fierce Wireless. That suggests to me these layoffs were indeed merger related, since T-Mobile could have simply stated that the departures were scheduled pre-merger, assuming that was true.
Peter Adderton, founder of prepaid wireless provider Boost Mobile, stated that a lot of these laid off employees were informed of the layoffs during an impersonal conference call:
Heard they let the @MetroByTMobile staff go over a conference call classy @JonFreier @TMobile @SievertMike wonder how @boostmobile staff will be notified over text? all Jokes aside this was my biggest concern these are people’s live’s….this is sadly just the start.
— Peter Adderton (@peter_adderton) February 26, 2020
Like most US telecom mergers, around 4% of the journalists that uncritically hyped this merger’s “synergies” will go back in a few years and scrutinize the company’s pre-merger promises. And all of the think tankers and analysts that rubber stamped the deal uncritically will go mute in a few years when the price hikes and additional retail and middle management layoffs arrive. This is, apparently, just how we do things in America, a country that seems habitually incapable from learning much of anything from history or experience.
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