T-Mobile’s CEO Aims To Cut Costs While Maintaining Aggressive UNcarrier Approach

john-legere

To say that T-Mobile’s CEO John Legere is a different sort of CEO than the mobile industry has seen in some time would be putting it mildly. Gone are the stuffy suits and standard industry talk and in is the trash-talking, sport-coat wearing John Legere.

His time spent at Global Crossing as CEO minted his belief that things she look cheap and be cheap, a philosophy he is planning to bring to T-Mobile. Much to the chagrin of his employees, Legere has already swapped out free soda for vending machines in the company’s corporate HQ, frozen merit-based pay increases and eliminated the free phone program for long-term employees.

Turning T-Mobile around is a tall order, no matter what the CEO is wearing, saying or slashing, it is an uphill battle no matter how you cut it. However, Legere acknowledges that he’s trying to bring attention to the company as the uncarrier, even growing his hair out and trading the standard suit for t-shirts to differentiate himself from the heads of the other major carriers.

T-Mobile’s strategy may be to offer cheaper, contract-free wireless service and Legere’s philosophy of cost-cutting and penny-pinching appears to fit right in with that strategy. However, even in a post-MetroPCS world and now at 43 million customers strong, T-Mobile remains a far cry away from the 100 million customer base of both AT&T and Verizon.

With regulatory agencies all but stating openly they want four national carriers in the marketplace and Dish making an offer for Sprint, T-Mobile will still need another partner(s) to solidify their competitive position.

For his part, Legere says consolidation is both “necessary and inevitable” and that T-Mobile will take part in some of that consolidation. In the meantime, Legere will continue to trash-talk the competition and work to change the mindset of the American consumer with T-Mobile’s UNcarrier and Simple Choice approach to the wireless market.

“The best way to get somebody interested in you is to scare the c— out of them by being better,” he said.

Wall Street Journal

 

Tags: , , , ,

  • GinaDee

    Cutting costs? Lower wages and perks for loyal employees and forget about rural expansion of LTE.

    This guy cut out free sodas at work and got rid of the free phone program for employees. Signs of a total cheapskate.

    He is now bound to keeping the stock price as high as possible no mater who he screws.

    T-Mobile’s only salvation is to be picked up by Softbank if Sprint decides to go with Dish.

    • verhouze

      I have to agree unfortunately.

    • Zacamandapio

      GinaDee,
      You want free sodas? I’m getting the feeling you feel entitled to a lot of stuff. Reminds me of government workers. But that’s ok. At least my tax money didn’t pay for your sodas.
      Go to McDonald’s for a free re-fill, after you pay the first one of course.

      • Spanky

        Oh stop it. Free soda was a perk offered by the company, akin to many companies offering free coffee. GinaDee has every right to complain about a perk being taken away.

        • Zacamandapio

          I live in the US. I never took any rights away from her.
          We all have freedom to complain; although, we may sometimes be wrong.

    • Jarred Sutherland

      Poor T-Mobile employees. Guess what, the MAJORITY of us don’t get perks like that. In fact, it has always been the rarity that companies offer that. While I disagree with freezing compensation increases, ESPECIALLY if it is merit based, sometimes it has to happen. T-Mobile was bleeding pretty bad before, you either become attractive by cutting or you go under being too soft.

      Soda is terrible for you anyways .. honestly the guy is doing you a favor. Think of the teeth you will keep as well as the other health benefits (hey, that might be another reason alltogether ..).

      • Dion Mac

        Jarred always knows what to say… even when i don’t agree with him.

    • Fraydog

      And how were those loyal employees doing? I’ll wait… T-Mobile was getting killed with defections to Sprint, AT&T, and Verizon. Why are you upset over free sodas? Go work for AT&T, Verizon, and Sprint, and tell me how you’re treated there. I’ll wait.

      I’d go one farther if I were Legere, I’d replace the soda fountains with water fountains and keep sugary high fructose corn syrup out of Bellevue. Poor baby, go find yourself a Kleenex, and get tougher, or leave willingly and go work for Shamwow or Randall Stephenson. We’ll see how well you get treated there…

      • Bud

        att has a union.

        • Magenta Fl

          At the end of the day, free sodas and forks , plates etc don’t give me anything in return for the good job Fl call center representatives do. You want to cut that so I can keep my job, try to eat healthier and be more productive then bring it on ! Although I was not so happy about loosing my merit increase I completely understand the Company’s point of view. We all need to revindicate ourselves and move forward. The Phone program doesn’t hurt eitheer, if you are good saving money then just do the same with available options, save the money on your savings account and buy the device. Perks might have been taken away but we still have 401k, which Sprint took away a long time ago to his employees when they bought out Nextel, My health insurance plan is far more competitive than in other companies and with our employee monthly plan ( which we save a lot of money per year) is still a perk that he understand is far more important. Competitive salary is still there and at the end of the day he only froze the salary increases, he did not take it away just yet. Every company restructures and look at all the same things he did, that’s not something new, and that is were the exceptional employees, like it’s captain, help to keep the boat afloat and don’t jump ship. I’ve been in T-Mobile for 3 years and my worth experience and ethic got evolve thanks to T-Mobile. So John, let’s bring the best of us to not only be #1, but also let’s keep this Company like The BEst place to WORK AND PERFORM !!! I’m 100% with my leader…

        • Fraydog

          Does their union ask for free soda for middle management and corporate employees for middle and upper management? NO. They ask for unprecedented investment in their networks and food on the tables for their families. Can’t even compare the CWA to the whining T-Mobile employees like GinaDee. They aren’t even close to comparable.

    • SouthernBlackNerd

      Softbank wants TD-LTE 2.5Ghz world domination. Sprint + Softbank becomes one of the largest smartphone buyers. They want to use that to leverage cheaper handsets and force 2.5Ghz to become a standard band. Tmobile would not help with that, plus they probably believe Tmobile does not have enough spectrum to dominate the Big two, the way Sprint/Clearwire can.

      • bleeew

        Whats TD-LTE?
        Im just asking you since you have a lot of knowledge.

        • SouthernBlackNerd

          It stands for Time Division LTE. It is basically LTE for unpaired spectrum. Most cellular spectrum is paired and has a separate frequency for downlink and uplink. AWS has 2100Mhz for downlink and 1700Mhz for uplink. TD-LTE allows companies with unpaired spectrum to deploy LTE by separating uplink and downlink into time slots. It is basically like having one road, but changing the direction of the road based on the time.

  • Alex Zapata

    Hey Legere, tell your engineers to add SRVCC to the network so you can really differentiate T-Mobile from the competition.

    • xmiro

      I’ve to look this up now, what’s SRVCC?

      • Alex Zapata

        Single radio voice call continuity. Basically, when the network is upgraded it’ll allow voice handoff from LTE to GSM to WiFi, completely seamlessly.

        • bleeew

          So if that is installed there will be no use for T-Mobile WiFi calling app on a supported SRVCC phone because the network supports SRVCC?

        • Alex Zapata

          Not necessarily, the phones will still need to be configured to communicate with a network supporting SRVCC. Likely in the form of an OTA update. Transparent to the user though.

  • galaxymaniac

    “belief that things she look cheap and be cheap” – don’t go cheap on spell/grammar check

    • jonathan3579

      Yes, it was a typo that I noticed as well but you’re being a total dick in the manner you’ve used to point it out.

      • galaxymaniac

        its called sarcasm, totally nothing limp or hard about that.

    • IkeM

      maybe something else was on his mind. “she look cheap”

      • Dion Mac

        lol

  • ripham1@gmail.com

    I dont think freezing merit-based pay increases makes employees more profitable. Unless the whole plan is for the plans to sell themselves, which is impossible to do nowadays since nobody wants to do any work themeselves

  • turtle6988

    You know when this douche cut merit increases? 2 weeks before they were suppose to hit out pay checks. My wife just had a baby and we were depending on that extra money. We were saving up for a new house, looks like thats on hold now.

    • Fraydog

      And TMUS is profitable now. How well would you and your new family be able to deal if, say, AT&T had won and cut your job? Or if TMobile went bankrupt and the entire operation was decomissioned and sold spectrum for scrap parts? Having stock in a profitable company may be a better long-term path, even if drastic measures have to be taken in the interim.

      • Jose Hernandez

        That is absolutely correct.

      • Ikem

        Many companies that did what T-mobile is currently doing are now gone. The ones that remain are still struggling. There is no proof that cutbacks will stop a company form going out of business. Where I live there was a store called ValueCity. they sold cloths way cheaper than the competition. When the economy went bad they where the first to close their doors. If you have to make a profit by cutting your employees income your headed in the wrong direction. Multiply this strategy by every major business in this country and you get a fucked up economy that doesnt realy recover.

        • tmo_rep

          Yea, Circuit City anyone…This is not going to be good for employees, which in turn might hurt customers as well.

        • fentonr

          No proof it will work, no. Not changing things WILL fail though. I like what he is doing.

    • WW

      I was laid off from a large PC maker in Jan. Before that our entire team hadn’t seen a raise in about 8 years. Trust me, not getting a raise is far better than the alternative.

      If a few percent raise was the make or break factor in buying a new house, you weren’t in a position to buy anyway.

    • Ordeith

      Time to start the job hunt. It’s best to do it before the job is gone completely.
      Unemployment is quite the pay cut.

      • Dion Mac

        Dont I know it

    • Steebie

      From a customer perspective, I don’t know how much worse an unhappy T-mobile employee could treat me… The customer service was great 6-10 years ago. Not so much the last couple of years. Would’ve left if I wasn’t such a cheapskate. T-Mobile would be making more money from me if they weren’t so ridiculous. Tried to add services to my line but they wouldn’t let me without starting a new 2 year contract. Screw that!

  • SouthernBlackNerd

    Dish could partner with Tmobile. Dish could provide extra spectrum and money to deploy LTE in rural markets. Dish lost the battle for clear wire, which is why they are trying to buy sprint, but even leading analyst say that the Softbank deal is better. Dish total number might be bigger, but they leverage sprint, while soft bank gives them capital and expertise.

    Dish/Tmobile would be a good partnership. It would give Tmobile extra spectrum to keep unlimited data running, plus they could bundle services. However, Do not let Ergen control anything on the Tmobile side.

    • Fraydog

      I disagree, I don’t want Ergen touching anything in this industry period.

      • Adrayven

        Say it again!

        He’s a blight, we need to leave him in his dark hole..

    • Ordeith

      as much as I like your homage to I.T. Crowd, I have to disagree.
      Dish is where end of life business models go to die. We don’t want T-Mobile to become another Blockbuster Video.

  • Zach Mauch

    what curse word is that quote at the end supposed to be? There is only one curse word I know that starts with a ‘c’ and it’s the only on that still seems to be off limits in our society.

    • bob90210

      Carp. Carp is a dirty word in some parts of the US since it’s a bottom feeding fish.

      • Ikem

        If its crap then they should have just typed it. Its not that bad of a word.

    • Brian T.

      I was wondering about that too. That particular word doesn’t seem to make much sense in that sentence, though you never know with Legere and all the awesome things he says.

    • guest

      crap

  • Juan Pablo Darquea

    Hello i’m a loyal customer for 10 years wheres my Free soda or Free Bill ah where

    • John

      I’ve been a customer with T-Mobile over 8 years and I get a $35 per month loyalty discount.

      • Manny

        I get a 17% discount.

        • John

          how much is your bill before any discounts?
          how long you been a customer of T-Mobile?

        • Manny

          No idea. And I haven’t been long, my family has and I don’t know their discount. I get mine because of partnership employment. It is a benefit of my company.

    • xmiro

      I got it, they made a commitment to pay my health insurance from the soda side effects

  • http://twitter.com/JDoakes_SD Joe Doakes

    Lol I love how sprint ads are all over this article.

  • http://profiles.google.com/mrice.hill Mr. Hill

    Maybe T-Mobile should go after Cricket or US Cellular next. I agree that consolidation is the only way to get close to AT&T/Verizon size.

    • bleeew

      Cricket is better way to go. They have AWS spectrum.

  • MetroPCS

    Yeah he laid off 10% of corporate and just threw the work on the people left. Cut the free soda, no plates, forks, knives, spoons or dairy creamer for coffee. Cut the phone discounts and no raises. Can’t even afford to have clocks in the building. I bet next he is cutting the company match for 401K. I
    ts become an awful place to work when it used to be a best place to work in 2008.

    • gc victim

      Just wait..he did the same at Global Crossing. He made zillions on the sale to Level 3 and the over-worked employees who were fired got 1 week for every year they had worked at Global Crossing. He cut the 401K match years ago at GC. Get out while you can!

    • mattinmo

      I worked for T-Mobile from July 2006 until this past March and I can say that what once was the best place to work and fun environment has turned into the most unbearable place. I used to recommend people work there but now I tell everyone I know that they will not like it. I was so tired of it and when they told me there were no raises and no discounts on phones for our loyalty and putting up with their crap I decided to leave. I even took a pretty big pay cut to go to a place that is truly a great place that cares about their employees.

  • Trav Montana

    Yeah I’m going to miss the free phones my sister who is a manager at a retail store here in NYC use to get :(

  • John Baby

    I love John Legere. He can f@(! my a$$ anytime!

  • Joe TMO EMP

    T-Mobile is in a position right now trying to “increase” number of its subscribers by this no contract plans to offset the churn (in my opinion, fraud activations are a major factor) and hoping the customers will stay with TMO, meanwhile cutting costs at the back in to pay for all the store remodeling that is current happening.

    The real problem is that T-Mobile needs to have QUALITY people working for the company. A major reason why this company has been failing for so long. I can not stress enough, from their out-dated in store computers to under-traded customer services reps and to loopholes that fraudsters can easily take advantages on. If T-Mobile had quality people to lead, it would not be such an issue.
    It used to be a very nice place to work, but i guess because of the competition it has to change and i agree with that. But again, Why is ATT so much bigger than TMO? is because ATT spends its money in the RIGHT places, ie. activation systems, customer experience tracking and so on.

    When value plans kicked in before the new CEO took the stage, i was thinking WHY would people sign contracts with Value plans. Not long after, the new NAC plans are the SAME exact thing as Value.. isn’t it? This is another example why TMO needed the right people to lead the company for so long now.
    Do not know if the current CEO will be a good fit for the company or not.. only time will tell and it will not take long….

    • tmomanager

      I’m a T-mobile assistant manager and 1 time winner circle as a rep in 2011 …I totally agree with you , we are only the result of BAD management

  • rat28

    For those TMO employee who are still whining about losing free soda and phone, the worst of cost cutting by John Legere is far from over. Based on his past action in Global Crossing, don’t be surprised he will relocate the whole HQ to a remote lower cost location. The current Bellevue HQ offices are way too expensive for him. With Washington State AG and Seattle Times pissing him off in the last few months, won’t be surprised if the relocation to another state to start as early as this year. This move will force HQ employees to quit en masse if they are not willing to relocate and save TMO from paying severance package. Other cost cutting measures will include consolidating all the regional offices since it is just another layer of middle management to John Legere. Lastly, outsourcing of call centers, customer care and engineering are definitely in the card. John Legere has expressed his admiration of how lean and mean MetroPCS is run with 3000+ employees , only 1/10 of T-mobile headcounts. TMO CEO definitely has a lot more fat to cut!!

    • M42

      What does any of that have to do with increasing coverage or subscribers? All those things do is to further line the pockets of Mr. Trashmouth and the greedy stockholders.

  • Magenta Fl

    While other companies have a union, if you don’t do a job well done you get fired anyways…. Union are good and bad but at T-Mobile if you do what you are supposed to do you don’t need to worry about your job. Just stick to the program

  • VG

    Arrrrrgh! I just updated Visual Voicemail on my Nexus 4, and the ads at the bottom are back! Cutting corporate costs is one thing, but generating revenue for the company with intrusive ads on customer phones is BAD!

    • castlefox

      How do you get Visual Voicemail for your Nexus4 ??? I keep having to call into my VM on Tmobile

  • tech916

    Nothing trips me out more than an OLD fart dressing like he is in his 20s

  • Jody Smith

    In other words he’s going to talk a lot of trash about other carriers but secretly he’s investing the bare minimum on his own just to get by.

    He only had $4 billion to invest in his network.. most of which went back to DT in Europe otherwise T-Mobile still wouldn’t be investing a dime and ride out its 2G network until someone else came along and bought them. The sad part is that it took the breakup of AT&T to accomplish this. T-Mobile USA has no cash to invest in a national 4G network.

    This guy even took away free sodas in his lunchrooms and the free phone program for his most loyal employees. Total cheapskate. He does this and in the same breath makes fun of other carriers who provide service to rural “dust bowl,” states.

    • Fraydog

      Again, another free soda employee? Oh for crying out loud. If DT was that concerned about the debt they wouldn’t have reduced it by another 4 billion, they would have taken their ball and went home.

      Also, listen to Legere’s actual dust bowl comments on youtube… he was giving Verizon credit.

  • tommest

    The ceo crying cause t-mobile is on mostly EDGE network