Instead of creating jobs, the T-Mobile/Sprint merger could lead to massive layoffs
There's been a lot of talk about the potential impact of the long-in-the-works union between T-Mobile and Sprint on wireless industry competition and cell service prices before, during, and after the multi-state lawsuit that nearly killed the mega deal, but one possible consequence of the merger that was far less debated has to do with jobs. Namely, job creation and/or job loss in the wake of the "New T-Mobile" birth.
the nation's current third and fourth-largest wireless service providers reiterated in their respective press releases celebrating the favorable court ruling earlier this week perhaps one of the most unlikely promises made throughout the long and convoluted merger approval process. Specifically, that New T-Mobile will be a job creator "from Day One", aiming to employ over 3,500 additional people than the "standalone companies would have had" in the first year of the joint venture alone.For their part,
That already impressive number is (officially) predicted to grow to 11,000 more full-time US employees, and on top of that, the "Un-carrier" turned fierce adversary for the "duopoly" has its sights set on building "more than 600 new retail locations and five new customer experience centers" creating around 12,000 additional jobs, many of which should boost the economy of small towns.
Analysts and unions are worried
The problem with those hefty promises is that they seem to go against one of the inherent goals and principles of pretty much any merger. These deals are almost always about "efficiencies", at least partially, according to a former FCC counselor cited by NBC News.
In this case, efficiencies means "getting rid of redundant stores and personnel", which is apparently a thing that even Judge Marrero mentioned... before deciding to green-light the merger anyway despite this and all the other concerns expressed by 13 state AGs and the Attorney General for the District of Columbia.
The Communications Workers of America labor union fears no less than 24,000 jobs nationwide could be eliminated as a result of "overlapping retail store closures at postpaid and prepaid (Boost and MetroPCS) locations", with another 4,500 jobs or so expected to be wiped out in the near future due to "duplicative functions at corporate headquarters in Overland Park, Kansas, and Bellevue, Washington."
Dish remains a huge question mark
Of course, the Sprint-owned Boost Mobile prepaid brand is set to be sold to Dish Network under the terms of an agreement signed to appease the DOJ's concerns over shrinking competition, but the president of the National Wireless Independent Dealer Association, an organization representing owners of phone stores, is not very optimistic about the future of no less than 8,000 local stores.
While some of these Boost retail locations are independently owned, others remain Sprint's property, and unless Dish steps in to keep them open, many could close their doors for good, costing a lot of employees jobs unlikely to ever come back. Granted, the nation's future number four mobile network operator has made big promises of its own, vowing to compete against "New T-Mobile" right off the bat and welcoming Boost employees and dealers to the "Dish family", but many analysts are still skeptical of Charlie Ergen's reliability.
The uncertainty might be the biggest problem for some T-Mobile, Sprint, Boost, and Metro employees, but one thing seems pretty much etched in stone, at least according to one analyst - mergers never result in more jobs.