T-Mobile US to cut 5,000 jobs as cheaper plans weigh on costs

A T-Mobile employee assists a customer as holiday shopping accelerates at the King of Prussia Mall

(Reuters) - T-Mobile US said on Thursday it would reduce its workforce by about 7% by cutting 5,000 jobs in the United States as the wireless carrier grapples with rising costs related to adding more subscribers in a competitive market.

The carrier has been taking the lion's share of subscribers looking for cheaper plans in the last three quarters through discounted bundles, but that has taken a toll on T-Mobile.

"What it takes to attract and retain customers is materially more expensive than it was just a few quarters ago," CEO Mike Sievert said in an email to employees.

The jobs cuts over the next five weeks will target corporate and back-office roles, and some technology jobs, Sievert said, adding that retail and consumer care divisions will not be impacted.

The carrier expects to incur a pre-tax charge of about $450 million in the third quarter.

T-Mobile had said in July that it expects wireless subscriber net additions between 5.6 million and 5.9 million.

Sievert said some areas of the business will implement more centralized models to improve efficiency and save costs.

Rival AT&T had also expanded its cost-cutting plan to $2 billion in July.

(Reporting by Chavi Mehta in Bengaluru; Editing by Anil D'Silva and Arun Koyyur)