Deutsche Telekom AG (DTE)’s T-Mobile USA unit plans to cut 900 jobs as part of a new round of cost savings as the carrier restructures its operations to cope with a decline in its contract-subscriber base.
The job losses are a second set of reductions after the the Bellevue, Washington-based company announced on March 22 it would be eliminating 1,900 jobs tied to the closing of seven call centers. The new round is related to the restructuring of “key functions and departments across the company,” according to a memo to staff from Chief Executive Officer Philipp Humm. A copy of the memo was obtained by Bloomberg News.
T-Mobile USA, the nation’s fourth-largest wireless-service provider, lost 510,000 contract customers in the first quarter. It is the largest national carrier in the U.S. that doesn’t offer an iPhone and is lagging behind larger rivals Verizon Wireless and AT&T Inc. (T), which are upgrading to long-term- evolution technology, enabling smartphones to run on speedier networks.
“Restructuring our organization will help us better respond to market and customer demands,” Humm said in the memo.
Under its restructuring plan, the company is also targeting more-aggressive rebranding in its ad campaigns as it seeks to cut costs by $900 million, Deutsche Telekom Chief Financial Officer Timotheus Hoettges said at a JPMorgan Chase & Co. (JPM) investors’ conference in Boston today.
T-Mobile USA and Deutsche Telekom executives are visiting analysts and investors this week and next to outline the new strategy.
After AT&T dropped its $39 billion bid for the carrier in December, Deutsche Telekom is working to make the unit a self- funding venture, which would open the possibility for a merger or a potential public offering of T-Mobile USA shares.
“I understand some banks would welcome that,” Humm said in an interview last week.
The company also has hired bankers, including TAP Advisors LLC, to sell a large portion of its network towers and has said it will spend $4 billion over two years on LTE network construction.
“There is no need for us to enter into any kind of deal,” Hoettges said today.
While T-Mobile doesn’t have an agreement with Apple Inc. (AAPL) to sell the iPhone, the network is being upgraded to be compatible with the device, Hoettges also said.
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