Tuesday, October 10, 2017

The Sprint T-Mobile Merger Will Be a Massive Job Killer -

We've already noted how the looming Sprint T-Mobile merger would dramatically reduce competition in the wireless space, and potentially threaten the recent return of unlimited data plans. While Sprint and T-Mobile will be certain to promise all manner of "synergies" if the deal is approved by regulators, historically, such M&As only lead to fewer jobs, higher prices, and more theatrical "non-price competition" -- none of which will be good for employees or customers.

And while Sprint has been trying to butter up the Trump administration by claiming the deal will create thousands of new jobs, one analyst thinks the deal might kill more jobs in total than Sprint currently has.

As it stands, Sprint has around 28,000 employees and T-Mobile has around 50,000. But Jonathan Chaplin of New Street Research predicts that as redundant positions are eliminated at the merged company, the result could be a net loss of "approximately 30,000 American jobs" -- more people than Sprint currently employs.

That finding mirrors earlier estimates by industry analyst Craig Moffett, who notes the biggest cuts will occur on the retail level as Sprint stores are shuttered.

"We conservatively estimate that a total of 3,000 of Sprint and T-Mobile's branded stores (or branded-equivalent stores) would eventually close," estimated Moffett earlier this year. As a result, Moffett estimated the total job losses at closer to 20,000. The most optimistic analysts in the sector are still predicting at least 10,000 eliminated jobs due to the deal.

Of course that's the precise opposite of what Sprint and T-Mobile have been claiming. Sprint executives have been buttering up the Trump administration for much of the year, at one point letting the President take credit for 2016 Sprint job promises that may never actually materialize, and were technically announced before Trump was even elected. Expect more bunk numbers as the lobbyist and think tank sales pitch for this merger heats up over the next few weeks.

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