T-Mobile layoffs stack up amid store closures

T-Mobile isn’t saying much about the number of employees let go this week, but a lot of people are reeling after a round of layoffs and store closings.  

It’s unclear exactly how many layoffs are happening. Wave7 Research estimates 600 territory, dealer development and rural indirect sales managers are affected.

In a blog post Thursday, T-Mobile Consumer Group President Jon Freier posed the questions: “Is brick-and-mortar retail dead?” He said: “Yes, the way we’ve known it is dead.” Because the physical shopping world is changing, “we’re entering a new era of retail where customers are no longer asking for more choices, they expect it.”

The one-size-fits-all approach to retail is long gone, he said, outlining how they’re using signature stores, experience stores, neighborhood stores and express stores to serve customers. They’re also using mobile stores, aka mobile trucks, and store-in-a-store concepts, similar to the kiosks found in Walmart, Best Buy and Costco.

The post did not address changes to its strategy of using dealers.  

Asked about layoffs and the company’s retail strategy, a T-Mobile spokesperson provided the following statement to Fierce:

“Jon Freier’s blog outlines our retail strategy evolution and, as noted, how we’re already making organizational shifts to support it. As a result, some T-Mobile employees in certain positions have been impacted and those employees have been notified of their next steps and options. We also are hiring talent across the company,” the statement said, adding that they aren’t providing any additional information.

Dealers vs. corporate

Jeff Moore, principal of Wave7 Research, said it appears that there’s a movement by T-Mobile to have more corporate-owned stores versus dealer stores.

As of the end of December, Wave7 counted nearly 7,000 T-Mobile stores operating and more than 4,000 of those were dealer stores; less than 3,000 were corporate stores.

But AT&T and Verizon have been moving to have a larger number of stores run by dealers as opposed to being corporate owned and managed, he said. That could be in part because that gets those expenses off their books and they don’t have the same union concerns that they would have with corporate-owned stores, he said.

Hence, T-Mobile’s strategy of moving to a model where it has more corporate stores “is not the direction of the industry,” Moore said. “That is the direction of T-Mobile.”

The National Wireless Independent Dealer Association (NWIDA) has been closely monitoring the situation. The organization reported Thursday that multiple sources said many, if not all, T-Mobile territory managers (TMs) were let go. “It appears it may be another step in T-Mobile going to a (vast) majority of corporate owned stores and eliminating the dealer network,” NWIDA posted on its site.

Commenters on Twitter spoke of “mass layoffs” at T-Mobile and offered to help.

The cuts are especially biting as T-Mobile and Sprint executives promised to add jobs as a result of their integration – an odd claim given that redundant positions are eliminated when companies merge. But they stuck to that script.