T-Mobile's digital era gets closer: employees axed, stock near 52-week low, customers bolt
Starting August 1, T-Mobile officially enters its digital era with momentum clearly against the company.
T-Mobile has issues as the digtal transition officially approaches | Image by PhoneArena
The clock is ticking down toward the all-digital T-Mobile, expected to start August 1. On that date, the carrier will remove access to legacy systems for all consumer upgrades and transactions that add a line to an account. As we get closer to that date, T-Mobile has started to pick up the pace of job cuts and store closings.
Some T-Mobile employees are receiving less than one week's notice before their stores close
In-store management positions such as Retail Sales Managers and Retail Associate Managers are being eliminated, forcing those managers still working to cover multiple locations. Some reps are complaining that they are being given less than one week's notice before their locations are being closed. To make matters worse, T-Mobile is limiting internal transfers to other locations and is requiring employees to reapply for open positions in other stores.
As an example, a T-Mobile employee who posts on Reddit under the username "iknowyourlying1981" wrote, "After many, many years of unwavering support and dedication to this company, I was notified by phone this morning I was being eliminated, and my last day was a lot sooner than I expected."
Which of the three issues affecting T-Mobile is the worst?
This employee worked at a corporate store but refused to give his position. He states that he is getting a severance package from T-Mobile.
For those of you who wondered when T-Mobile would start getting around to laying off reps in light of its digital transition, it seems that the company started doing this late last year and things have only gotten worse.
Other T-Mobile employees commenting on Reddit have negative things to say about the carrier and new CEO Srini Gopalan. One, with the username "Commercial-Engine-35," says, "Srini [is] really driving this company into the dirt."
Even former UScellular subscribers are being affected
Even former UScellular employees are finding themselves on the verge of getting axed. You might recall that T-Mobile acquired all 4 million retail wireless customers and all of the UScellular wireless retail locations. One such employee works at a New England UScellular location and says that he just had the 3-minute meeting during which he was told that he was being laid off.
It really feels like the whole company, once admired as the Un-carrier, has been falling apart. This is being reflected in the shares of T-Mobile, which fell $4.43 on Thursday, or 2.44%, to close at $177.02. That is exactly $3 above the stock's 52-week low of $174.02. Marcelo Claure, the former CEO of Sprint and currently a member of T-Mobile's Board, sold 550,000 T-Mobile shares this past February for an average price of $217.57.
T-Mobile's shares have been declining
While Claure's sale generated total proceeds of $119.7 million, the discretionary open-market transaction came at a propitious time just before the stock started heading south. Selling at that time saved Claure from having to settle for proceeds that would have been $23,952,500 less. As it turned out, Claure sold his shares for close to $119.7 million instead of the approximately $97.4 million that those shares are worth today.
Marcelo Claure, former Sprint CEO, on the left. | Image by T-Mobile
We're just admiring his timing, that's all. On the other hand, early last month we told you that Andre Almeida, Chief Broadband, Enterprise & Emerging Business at T-Mobile US, purchased 5,097.44 shares of T-Mobile US common stock, paying $1,000,015. His purchases took place at an average price of $196.18.
Things don't look as T-Mobile enters its digital era
As proof that insiders don't always know what is going to happen with their company's stock, at its current price Almeida has lost (on paper) roughly $113,000 during this 11.3% decline. But don't cry for Almeida as he owns T-Mobile shares currently valued at $7.8 million.
You have employees leaving, the stock declining, and a postpaid phone churn that, at 1%, was the highest among the "Big 3" during the first quarter of this year. This indicates that the percentage of premium postpaid customers is leaving at a higher rate than the competition.
Things are getting more and more worrisome for T-Mobile employees, investors, and even its customers as T-Mobile's digital era is about to officially start. Some might consider this to be a bad omen for T-Mobile's transition.
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