T-Mobile US to lay off 5,000 employees amidst cheaper plans impact

T-Mobile US announced on Thursday that it plans to decrease its employee count by approximately 7%, resulting in the elimination of 5,000 jobs within the United States. This move comes as the wireless carrier navigates the challenge of escalating costs associated with attracting more subscribers in a fiercely competitive market.

T-Mobile has dominated the influx of subscribers seeking cost-effective plans over the past three quarters by offering discounted bundles. However, this strategy has had adverse effects on the company.

"What it takes to attract and retain customers is materially more expensive than it was just a few quarters ago," CEO Mike Sievert said in an email to employees. 

As reported by Reuters, the upcoming job cuts within the next five weeks will focus on corporate and back-office positions, along with certain technology roles, as mentioned by Sievert. He also clarified that the retail and consumer care divisions will remain unaffected by these cuts.

Anticipating these changes, the carrier foresees an approximate pre-tax charge of $450 million in the third quarter. T-Mobile had previously stated in July that it anticipated net additions of wireless subscribers to range between 5.6 million and 5.9 million. 

Sievert shared that certain segments of the business will adopt more centralised models, aiming to enhance efficiency and generate cost savings. 

In a similar vein, rival AT&T had expanded its cost-cutting strategy to encompass a total of $2 billion in July.