Merger talks can create employment uncertainties
Sprint (S) is rolling out retention packages to its employees, according to a Kansas City Business Journal report. Although the amount of the package is not currently known, it’s believed to be intended to keep key staff on board as Sprint pursues its merger with T-Mobile (TMUS).
Mergers can result in change, so worried employees might use the time before a proposed merger closes to seek employment elsewhere if they fear their positions might be eliminated. Since there is no guarantee that regulators will approve the proposal to combine Sprint and its rival T-Mobile, Sprint could be preparing for the uncertainty by ensuring that it will still have its key talents to continue life on its own if the merger is blocked.
Sprint eyeing 2019 for 5G rollout
Sprint is also looking to launch its 5G (fifth-generation) service next year, so it could be offering retention bonuses to employees to ensure that it doesn’t lose the ones it needs to work on 5G. Sprint has so far identified nine markets for its 5G rollout next year.
Verizon (VZ) is looking to launch its fixed 5G services in at least four markets this year, while AT&T (T) is looking to roll out 5G services in a dozen markets during the year. T-Mobile, which is working with network vendors Nokia (NOK) and Ericsson (ERIC) on its 5G program, is aiming for nationwide 5G coverage by 2020.
Merger portrayed as good for the labor market
Sprint and T-Mobile not only hope the merger would make them better competitors against Verizon and AT&T, but they also hope it would result in more jobs for Americans. Sprint’s retention package for employees during the merger talks could be part of an effort to show that the proposed merger would be good for the American labor market.
Sprint closed its fiscal Q4 2017 (March quarter) with 54.6 million subscribers.