Rumors surfaced yesterday that most of the marketing team at Sprint’s Boost Mobile brand had been laid off, at a time when the prepaid wireless provider is at the center of Justice Department discussions weighing approval of Sprint and T-Mobile’s proposed merger.
In response to request for confirmation and comment about the rumors that most of the department was cut, a Sprint spokesperson sent the following statement to FierceWireless via email: “To enhance our efficiency and nimbleness while we continue to aggressively compete in the Prepaid Wireless industry, we recently made some organizational changes to ensure our Prepaid business is structured appropriately.”
A tweet by Boost Mobile Founder Peter Adderton suggested the majority of the marketing team was let go, but after this story was initially posted, a company spokesperson later said the job cuts impacted less than 5% of employees in the Boost marketing department. The spokesperson declined to give the exact number of employees affected.
Hearing the Majority of the @boostmobile marketing team were Just Let go ?? @JusticeATR @fcc @AjitPaiFCC so Much for Jobs being preserved this delay is Hurting real People and @sprint is clearly hemorrhaging TIME TO ACT.— Peter Adderton (@peter_adderton) July 15, 2019
Sprint and T-Mobile previously agreed to divest Boost Mobile in an effort to gain approval for the pair’s proposed $26.5 billion merger and have been in lengthy discussions with the DOJ. To appease competition concerns the Department of Justice reportedly wants the companies to sell Boost along with spectrum assets to help set up a fourth nationwide provider.
There had been a flurry of news reports naming potential suitors for the Boost buy, but most recently Dish Network has been pegged as the main contender for the prepaid brand, along with other assets.
With Boost’s uncertain situation, Principal Analyst of Wave7 Research Jeffrey Moore said the layoff move is poorly timed.
“The fate of Boost Mobile is very much in the air and the skills of Boost’s marketing team have been a strong asset,” Moore told FierceWireless. “Boost is an aggressive, feisty competitor in prepaid and these changes likely will have a negative impact.”
Moore also noted that Boost Mobile is a top prepaid brand TV ad spender.
“Metro by T-Mobile leads all other brands in terms of national TV ad spending, in nearly all recent months,” said Moore. “Generally, Boost is a fairly close second, with no other brand spending on a comparable level.”
Roger Entner, founder and lead analyst of Recon Analytics told FierceWireless the layoffs don’t bode well for Sprint or for the future of Boost. The analyst also called into question Dish’s reported plan of purchasing Boost.
“One would think that if Charlie Ergen was really buying [Boost Mobile] he would want to have a marketing department,” Entner said. “So this looks like Boost is going away as a brand.”
Entner said it should also have an impact as the DOJ considers approval of the Sprint/T-Mobile deal if a Boost sale is one of the concessions.
“If the DOJ wants to have a viable fourth nationwide competitor, a viable competitor has to have a marketing department,” said Entner. “This certainly makes it a lot tougher for Boost to be a viable brand afterwards.”
As the T-Mobile and Sprint merger saga continues to play out, states suing to block the deal asked a New York court on Monday to push back the scheduled Oct. 7 trial date. The states argued the trial date is no longer feasible because T-Mobile and Sprint didn’t meet certain deadlines.
Article was updated to include information on the percentage of employees who were impacted by layoffs.