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Shenandoah Telecommunications Company (nicknamed “Shentel”) has announced that it will cut 340 employees, or 30% of its workforce, in its six-state Mid-Atlantic service area.
“About 90% of the cuts are from employees who support wireless operations and who will not automatically transfer to T-Mobile as part of the transaction,” the company said in a statement. Shentel agreed to sell its wireless business to T-Mobile earlier this year.
Shentel said it would employ around 860 workers after the cuts. The operator said it anticipates the cuts to cut operating expenses by around $ 4 million.
The company said it now plans to complete its transaction with T-Mobile by the third quarter of this year; the company previously said it plans to close the deal in the second quarter.
“We are working in coordination with T-Mobile to help transition as many affected employees as possible to T-Mobile after the transaction closes,” said Christopher French, CEO of Shentel, in a statement, describing a number of the company’s efforts to career transition services to its affected employees.
“We believe that a reduction in business costs is necessary given the magnitude of the costs,” wrote financial analysts at Raymond James following Shentel’s announcement. Analysts said Shentel’s wireless business is about a third of the size of its wired broadband business.
T-Mobile in February announced plans to purchase approximately 1.1 million mobile customers in parts of Virginia, West Virginia, Pennsylvania, Maryland, Kentucky and Ohio from Shentel for $ 1.95 billion. Shentel later said it would use the proceeds of the transaction to repay loans, issue a special dividend and potentially fund strategic acquisitions.
The T-Mobile deal with Shentel wraps up one of the final threads of the plot stemming from T-Mobile’s successful purchase of Sprint last year.
However, it also adds to the job cuts surrounding T-Mobile’s acquisition of Sprint. Although the company has pledged to add jobs rather than cut them as part of its deal with Sprint, recent SEC filings with the company show T-Mobile now employs 5,000 fewer workers than the two. companies employed before their merger.
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?? Mike Dano, Editorial Director, 5G and Mobile Strategies, Light Reading | @mikeddano
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