Sprint’s announcement Tuesday doesn’t actually seem like such good news for Kansas City
The proposed $26 billion merger between wireless carriers T-Mobile and Sprint — really, it’s T-Mobile purchasing Sprint — seems more likely than not to go through, but it ain’t a sure thing. The deal, which would reduce the wireless market to three carriers, will require the approval of both the FCC and the antitrust division of the Department of Justice. Next month, the CEOs of both companies will testify before House committees in an attempt to quell legislators’ growing concerns about concentrated power in the telecom industry.
On Tuesday, the two companies issued an interesting news release. In it, they announced a plan to build five new customer service centers should the deal get the green light from the government. The companies say each call center would create 1,000 jobs. The first call center — the only one announced so far — would be in Overland Park, the current headquarters of Sprint (or “Pre-Mobile,” as some employees have taken to calling the company). The press release arrived with quotes from Senator Jerry Moran and Governor Laura Kelly praising these theoretical new jobs.
Adding 1,000 jobs in Overland Park — Sprint head Marcelo Claure called it “HQ2” in the release — does sound nice. But how many of Sprint’s current Kansas employees will lose their jobs if the merger is approved? The Communications Workers of America estimates that, between the two companies, 30,000 jobs — 25,500 in retail stores and another 4,500 corporate rank-and-file in duplicate positions — would be eliminated.
Moreover, it seems quite possible that high-skill, high-paying jobs currently based in Overland Park — network operations, marketing, finance — will relocate to HQ1, in T-Mobile’s home of Seattle. In return, Overland Park gets a call center and the largely lower-skill, lower-paying jobs it brings.
A level analysis of Tuesday’s announcement would have to subtract those layoffs and relocations from the rosy 1,000 jobs figure. A decline in the quality of jobs would also have to be taken into account. When you do that, Tuesday’s announcement looks less like a gift to Kansas and more like an attempt to win favor with regulators ahead of a deal that will benefit shareholders and executives far more than it will ordinary consumers and workers.
♦
