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T-Mobile cuts US jobs

Spencer, KimballMarch 23, 2012

After US regulators stopped a tie-up between American phone giant AT&T and Germany-owned T-Mobile USA, the loss-making US subsidiary of Deutsche Telekom has announced major job cuts in efforts to consolidate.

https://p.dw.com/p/14PhZ
Red traffic light in front of Deutsche Telekom logo
Image: AP

T-Mobile USA said it was cutting 1,900 jobs in the United States in an attempt to reduce costs and become more competitive in the fiercely contested US mobile phone market.

The job cuts would affect "nearly half" of all T-Mobile call center employees in the US and shut down seven out 24 centers in the country, the US wireless subsidiary of Germany's Deutsche Telekom said.

"These are not easy steps to take, but they are necessary to realize efficiency in order to invest for growth," Philipp Humm, T-Mobil Chief Executive, said in a statement.

The company - based in Bellevue, Washington – also announced it would modernize its network, add new technology and hire more sales staff as part of its restructuring drive.

Tight squeeze

T-Mobile USA used to be a growth engine for Deutsche Telekom after it moved into the US wireless market with the 40-billion-euro ($52.7 billion) purchase of VoiceStream in 2000.

However, the company remained the smallest of the four national cellphone carriers in the US, running into serious troubles at the end of last year after it failed to secure iPhone services. In the fourth quarter of 2011 alone, it lost 802,000 subscribers on contract-based plans.

Deutsche Telekom wanted to sell the unit to AT&T, but the US phone giant eventually gave up on the $39-billion deal in December after US regulators raised objections.

A cash payment to the tune of 2.3 billion euros from AT&T owing to the failed takeover, was "not sufficient to offset the huge writedowns" incurred from T-Mobil, Deutsche Telekom Chief Executive Rene Obermann told the company's annual news conference in February.

Obermann also said that he was "still on the lookout for partnerships" in the US, adding, however, that this would not entail "a sale of T-Mobile USA."

uhe/gb (Reuters, dpa, AFP)