T-Mobile USA Moved Jobs Abroad in Call-Center Cuts, U.S. Says

Deutsche Telekom AG (DTE)’s T-Mobile USA unit moved jobs to other countries as it cut local call-center employees, the U.S. Labor Department said, contradicting claims by the company.

“The workers’ firm has acquired from a foreign country services like or directly competitive with services supplied by the workers which contributed importantly to worker group separations at T-Mobile USA,” the authority said in a decision posted on its website. Based on that conclusion, it determined the workers were entitled to apply for government assistance.

T-Mobile USA shuttered seven out of 24 call centers and cut 1,900 jobs to reduce costs amid a shrinking client base after the failure of a proposed $39 billion sale to AT&T Inc. (T) last year. In May, it said it would cut another 900 jobs. Deutsche Telekom Chief Executive Officer Rene Obermann is currently seeking a new chief for the unit after Philipp Humm left the carrier last month to join rival Vodafone Group Plc (VOD) in Europe.

The division was “surprised” by the Labor Department’s decision “because the facts provided did not support that the work done by these employees was sent offshore,” it said in a statement sent by David Henderson, a spokesman. The company “has long had and does utilize service partners both within the U.S. and in other countries,” it said.

Deutsche Telekom, based in Bonn, has explored options to combine the U.S. unit with local rivals, including MetroPCS Communications Inc. (PCS), people familiar with the situation have said.

To contact the reporter on this story: Cornelius Rahn in Frankfurt at crahn2@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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