A significant round of layoffs is happening at the Bellevue headquarters of T-Mobile USA just ahead of its merger with MetroPCS, according to people inside the company.
Employees are expecting the cuts to happen Thursday, when conference rooms at the company are reserved for “integration” meetings. The cuts may affect more than 100 people in marketing and other groups.
T-Mobile did not immediately comment Wednesday evening.
If the merger goes through as expected later this year, T-Mobile will become a publicly listed company and is expected to accelerate its rollout of a more advanced network. It’s already one of the largest employers in the Northwest with about 4,800 employees locally — most in the Factoria-area headquarters — and 36,000 nationally.
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T-Mobile hasn’t specified how many jobs would be affected by its merger with Dallas-based MetroPCS, but the combined company would have overlapping administrative positions.
The likelihood of major layoffs has drawn political pressure from a telecommunications union, which is calling for job protections to be a condition of the merger’s regulatory approval.
T-Mobile has steadily reduced the size of its workforce in recent years through restructuring and consolidation of its call centers, but largely has spared the Bellevue headquarters, where its highest-paid jobs are located.
Last year, at least 4,200 jobs were cut, including 3,300 layoffs at call centers announced that March. In May, the company announced 900 jobs were cut in another round of layoffs across the company, but it said it was likely to hire at least that many later in the year, as it built up its business-sales group.
T-Mobile similarly has argued during the merger process that overall employment will benefit from having the stronger company that the merger would create.
Consolidation is inevitable in the wireless industry, with smaller players bulking up to better compete against market leaders AT&T and Verizon Wireless. Such thinking led to Tokyo-based Softbank investing in third-place Sprint last year and AT&T’s failed attempt to acquire T-Mobile in 2011.
T-Mobile is the country’s fourth-largest carrier, with 33 million subscribers. The merger with MetroPCS is intended to give the combined company the resources to challenge Sprint for third place and better compete with AT&T and Verizon.
The deal will also accelerate T-Mobile’s effort to provide 4G LTE wireless service across the country. MetroPCS already provides LTE, and T-Mobile hopes its LTE service will reach 100 million potential customers in July and 200 million by the end of the year.
Simultaneously, T-Mobile is trying to rebuild its stand-alone business after declines recorded as the company came under some uncertainty when AT&T tried to buy it in 2011. That $39 billion proposed merger was withdrawn after federal officials moved to block it.
Last month, T-Mobile reported seeing growth, but fourth-quarter sales fell 5 percent from the same period the previous year.
Layoffs after a tough quarter during a period of transformation aren’t unusual.
T-Mobile also may be trimming down to prepare to go public and woo investors who will analyze its operating expenses.
But given the pressure to preserve jobs during the MetroPCS merger, some may see this week’s layoffs as an attempt to reduce head count before potential mandates from Washington, D.C.
Last week, a coalition in Congress asked the Federal Communications Commission to place conditions on the merger, requiring the company to preserve jobs. FCC approval is needed to complete the merger.
Similar requests to the FCC have been made by the Communications Workers of America (CWA), which is warning that “large numbers of job losses” could result from the merger.
T-Mobile is objecting to the calls for job protections, saying it’s an unfair requirement and that its objective is to build a more competitive network and not save money through layoffs.
“Indeed, the goal of the transaction is to grow the existing T-Mobile and MetroPCS brands and businesses and emerge as the country’s leading value provider,” lawyers for the companies said in a Feb. 21 filing with the FCC.
CWA spokesman Al Kogler, at the union’s regional office in Colorado, said administrative and managerial jobs at T-Mobile’s headquarters are “not the ones that are really on our radar.” The union is more focused on workers at call centers, stores and support positions, particularly because MetroPCS has favored outsourcing, he said.
Kogler said T-Mobile Chief Executive John Legere told employees of a hiring freeze a few weeks ago, in preparation for the merger.
Brier Dudley: 206-515-5678 or firstname.lastname@example.org