In late August, T-Mobile made the unfortunate announcement of a workforce reduction, resulting in the layoff of approximately 5,000 employees, which accounts for approximately 7% of its total workforce. This news not only brought sadness to the affected employees, but it also served as another instance where T-Mobile appeared to deviate from its pre-acquisition promises, particularly in relation to the Sprint merger.
Now, the company is making some new changes that will benefit shareholders. T-Mobile announced a dividend program where it will pay shareholders money from a $3.75 billion fund over the next 5 quarters. A dividend is like a bonus that shareholders get for believing in the company.
The more shares investors own, the more money they’ll get from the fund. T-Mobile’s competitors, AT&T and Verizon, pay annual dividends worth $8 billion and $11 billion, respectively. T-Mobile says it will increase its payouts by 10% each year.
This dividend program seems to be T-Mobile’s way of thanking shareholders for sticking with the company. But most of this money will go to wealthy shareholders, not employees. T-Mobile is also spending $14 billion to buy back its own stock, which also puts more cash in shareholders’ pockets.
All this is happening soon after T-Mobile laid off over 10,000 workers in recent years. The CEO said these layoffs help make the company more efficient. But starting new programs that reward shareholders right after job cuts seems insensitive. These moves don’t really match T-Mobile’s advertised image as an “uncarrier” that sides with customers instead of investors.
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