T-Mobile USA closing call centers, cutting staff

NEW YORK Thu Mar 22, 2012 5:41pm EDT

Signage for a T-Mobile store is pictured in downtown Los Angeles, California August 31, 2011. REUTERS/Fred Prouser

Signage for a T-Mobile store is pictured in downtown Los Angeles, California August 31, 2011.

Credit: Reuters/Fred Prouser

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NEW YORK (Reuters) - T-Mobile USA is cutting 1,900 jobs, or about 5 percent of its workforce, as it closes seven call centers, and the company said it may cut more jobs in coming months.

The unit of Deutsche Telekom (DTEGn.DE) is cutting costs to preserve cash for investment in its network as part of a bigger restructuring following the failure of its proposed $39 billion purchase by AT&T Inc (T.N) late last year due to regulatory opposition.

Since Deutsche Telekom has signaled its readiness to exit the U.S. market, T-Mobile USA is looking at ways to make itself more financially independent of its parent.

The No. 4 U.S. mobile service, which has been losing customers to bigger and smaller rivals, said on Thursday that it will now make do with 17 call centers instead of 24 since it now handles a smaller volume of customer calls because it has fewer customers.

The seven centers employed about 3,300 people. The company, which has about 36,000 employees, said it was offering transfers to employees of the shuttered call centers, as it plans to add 1,400 jobs at the remaining 17 centers.

It also plans to restructure other parts of the business by the end of the second quarter but it declined to give specifics beyond saying that the changes would not affect service representatives in the 17 remaining call centers, engineering technicians or front-line employees in its stores.

The company, which is spending $4 billion to upgrade its network, did not disclose the financial impact of the restructuring.

Even as it is cutting customer support staff, T-Mobile USA is also planning other initiatives aimed at reversing customer losses that were exacerbated by the nine months of distraction when it was seeking approval for the AT&T deal. For example, it plans to spend $200 million this year on a rebranding campaign.

The seven call centers will stay open for three months after the announcement. Employees who lose their jobs will be offered severance pay and two months of healthcare coverage, the company said.

"We hope as many as possible pursue transfers and stay with T-Mobile," said Larry Myers, Chief People Officer of T-Mobile.

Unions had supported the purchase by AT&T, which has unionized workers, as they had hoped the deal would provide more employment protection to T-Mobile USA workers.

According to the company, the call centers to be closed are in Allentown, Pennsylvania; Fort Lauderdale, Florida; Frisco, Texas; Brownsville, Texas; Lenexa, Kansas; Thornton, Colorado and Redmond, Oregon.

(Reporting By Sinead Carew; Editing by Gary Hill)

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