ON THURSDAY, T-Mobile US (TMUS.O) announced that it would remove 5,000 employees from its US staff, reducing its headcount by around 7% as the cellular carrier battles mounting costs associated with gaining new users in a cutthroat industry.
Through lower bundles, the carrier has captured the majority of customers looking for less expensive plans over the last three quarters, but that has cost T-Mobile.
CEO Mike Sievert wrote in an email to staff, “What it takes to attract and retain customers is materially more expensive than it was just a few quarters ago.”
According to Sievert, the corporate, back-office, and certain technology positions will be affected by the job layoffs over the course of the next five weeks; however, the retail and consumer care divisions won’t be affected.
The carrier anticipates a third-quarter pre-tax charge of around $450 million.
In July, T-Mobile stated that it anticipated net gains of between 5.6 million and 5.9 million cellphone subscribers.
According to Sievert, some parts of the company will use more centralized models to boost productivity and cut expenses.
In July, rival AT&T (TN) increased the scope of its cost-cutting strategy to $2 billion.
