Pending T-Mobile Layoffs More 'Business as Usual' Than MetroPCS Merger-Related

By Arselia Gales and Craig Galbraith Comments
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**Editor's Note: Please click here for a recap of the biggest channel-impacting mergers in Q4 2012 or here for the biggest M&A during that time in the service provider-BSS/OSS spaces.**

A final decision on T-Mobile's proposed acquisition of MetroPCS may come as soon as April 12.

The U.S. Department of Justice (DOJ) has approved the merger while the Federal Communications Commission, the Committee on Foreign Investment in the United States and MetroPCS shareholders still need to make their decision.

In addition, it is expected that more than 100 people will be laid off in marketing and other groups at T-Mobile's headquarters before the merger is finalized.

"Passing the DOJ approval (or rather, silent assent) is a good first step, but T-Mobile certainly must be holding its breath in light of its last failed merger (with AT&T, with whom it is now quite amusingly feuding)," noted Yankee Group senior analyst Rich Karpinski, commenting specifically on a PC Mag article. "The reported layoffs, coming well ahead of the deal approval let alone integration with MetroPCS, should probably be more considered as business as usual than a pure result of the would-be merger."

Meantime, T-Mobile is firing back at the Communications Workers of America union, which earlier this week claimed that its purchase of MetroPCS would potentially result in thousands of layoffs.

In a filing with the FCC, T-Mobile said, "[our] business plan is not only to continue both the T-Mobile and MetroPCS brands, but to further expand the MetroPCS brand into other metropolitan areas across the country — the vast majority of which are unlikely to be served by a standalone MetroPCS absent the proposed transaction. While CWA has asserted that the proposed transaction is premised on cost-cutting that will result in job losses numbering in the thousands, this is simply not consistent with the record before the Commission and [our] highly confidential business plans, which have been submitted. In fact, the anticipated total position reductions ... number in the hundreds – not thousands – for a combined workforce of nearly 38,000."

T-Mobile USA is the country's fourth-largest mobile operator, while MetroPCS is the fifth-largest. The combined company is expected to compete better with larger rivals Verizon Wireless, AT&T and Sprint.

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