On Thursday, March 22, T-Mobile USA announced that it would be closing 12 of its 24 U.S based call centers in an effort to reduce costs. These call centers are located in Pennsylvania, Florida, Texas, Kansas, Colorado, and Oregon. T-Mobile has been struggling to keep pace with its competitors, as they have continued to lose customers at a rapid pace.
CEO of T-Mobile USA, Philipp Humm, released a statement on the matter, explaining that such actions were needed to “realize efficiency in order to invest for growth.” In total, the company plans to cut 3,300 positions, but has said that it will hire an additional 1,400 employees at its remaining call centers. As a result of these planned changes, T-Mobile USA will be terminating approximately 1,900 employees.
A large concern has been that a third of the call centers to be closed received taxpayers subsidies in return for increased employment and economic development. Now the company is planning to leave these communities, while having receiving a total of $14.2 million in taxpayer subsidizes. However, some of the subsidies received by these call centers, came with what is referred to as “clawback provisions,” which typically contains language stating that a company must uphold its end of the bargain (often the creation of a certain number of jobs), or else the company must repay all or part of the subsidies that it has received. Thus, these clawback provisions should serve to mitigate some of the damage that would have otherwise been caused by this decision. Nonetheless, this decision, made in tough economic times, is still devastating for the communities and the thousands of employees who will no longer realize the benefits of these jobs.