Deutsche Telekom Eliminating 1,900 US Jobs in First Round of Cuts at T-Mobile

By Stephen Fuchs on Email @StephenWFuchs

In the wake of its disastrous selloff fail with AT&T late last year, T-Mobile USA CEO Philipp Humm sent out a memo to all employees to inform them that 7 of their call centers would be closing and as a result 1,900 jobs would have to be cut.  These only appear to be the first in a few rounds of layoffs due this year… a total of 3,300 positions are expected to be cut in the next few months.

The Deutsche Telekom subsidiary has been struggling in the US mobile phone market as it still remains the smallest of the four nationwide cellphone carriers.  Just in the fourth quarter of 2011 alone, T-Mobile lost 802,000 contract subscribers. Last year, the company had hoped that the $39 billion buyout deal from AT&T would go through, but it ultimately failed after US regulators raised numerous anti-competitive concerns.  Deutsche Telekom Chief Executive Rene Obermann spoke to shareholders in February and stated that the company was “still on the lookout for partnerships” in the United States, however, the idea of selling T-Mobile USA seems to no longer be an option.

Philipp Humm tried to add some hope in his memo to employees by saying that there will be an announcement by the end of May to detail some restructuring of the company with the expectation to “be better optimized to match our customer base and call volumes”  Even though T-Mobile has high hopes for turning itself around, it does little to comfort the hundreds of employees losing their jobs.

Read Humm’s complete memo to employees below.

Dear colleagues,

I have difficult news to share today: we are consolidating our call center operations and closing seven of our 24 facilities. This decision was not easily reached, but it is a necessary measure. The reality is our cost structure must be better optimized to match our customer base and call volumes.

The affected Customer Service facilities are Allentown, Pennsylvania; Fort Lauderdale, Florida; Frisco, Texas; Brownsville, Texas; Lenexa, Kansas; Thornton, Colorado; and Redmond, Oregon. The consolidations will result in 1,900 net job reductions. Approximately 3,300 employees at the seven impacted facilities will be affected, and we will begin hiring immediately at the remaining 17 call centers to fill as many as
1,400 positions.

Impacted call centers will remain open for three months following this announcement. Affected customer service representatives will have the option to transfer to any of the remaining 17 call centers. Employees who choose not to transfer and are employed on the date the center closes, will be offered transition packages with severance pay and outplacement support. T-Mobile is partnering with an outplacement firm to provide on-site career centers at all seven facilities. Every employee will have access to a personal career coach and be offered job search training and tools. In addition, T-Mobile will pay for two months of continued health care coverage under COBRA (which is available for up to 18 months for eligible employees who elect this option).

Looking ahead, we will also be restructuring other parts of the company. It is important to note this will not include our customer service representatives in the remaining 17 call centers, technicians in engineering or front line employees in our T-Mobile corporate-owned stores. In other parts of the organization, the majority of changes will be announced by the end of May 2012. Senior leaders are intently focused on making the best possible choices standing on the foundation of our shared T-Mobile Values. The outcome will be an organization that is structured efficiently and closer to the customer. Leaders will share more information as plans evolve.

These are not easy steps to take — or, I know, to read. We must address our business realities so we can focus on getting T-Mobile back to growth.

Our commitment, as we go through this process, is to provide clear perspective and understandable rationale, be forthright in our communications regarding our decisions, and be respectful and compassionate in our treatment of affected individuals.

Thank you for your ongoing commitment and support.

With sincere appreciation,

Philipp Humm
CEO & President
T-Mobile USA

Stephen Fuchs
Stephen founded German Pulse and LGBT Germany out of a passion to introduce Americans to a Germany that goes beyond beer and polka (although with enough beer he has been known to polka it up a bit). He's a coffee addict, lover of wine and good times, a hit in the kitchen and editor of TV commercials. You can follow him on Twitter (@StephenWFuchs) to find out a lot more.
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