April 6, 2021
Shenandoah Telecommunications Company (dubbed "Shentel") said it will cut 340 employees, or 30% of its workforce, across its six-state Mid-Atlantic service area.
"Approximately 90% of the reductions are employees who support wireless operations and who will not automatically transfer to T-Mobile as part of the transaction," the company said in a release. Shentel agreed to sell its wireless business to T-Mobile earlier this year.
Shentel said it will employ around 860 workers following the cuts. The operator said it anticipates the cuts to reduce its operating expenses by around $4 million.
The company said it now expects to close its transaction with T-Mobile by the third quarter of this year; the company previously said it expected to close the deal in the second quarter.
"We are coordinating with T-Mobile to assist in transitioning as many of the affected employees as possible to T-Mobile following closing of the transaction," Shentel CEO Christopher French said in a release, outlining a number of efforts by the company to provide career transition services to its impacted employees.
"We believe a reduction in corporate costs is necessary given the size of the costs," wrote the financial analysts at Raymond James following Shentel's announcement. The analysts said Shentel's wireless business is roughly a third of the size of its wired broadband business.
T-Mobile announced in February plans to purchase roughly 1.1 million mobile customers across portions of Virginia, West Virginia, Pennsylvania, Maryland, Kentucky and Ohio from Shentel for $1.95 billion. Shentel subsequently said it will use the proceeds from the transaction to pay down loans, issue a special dividend and potentially fund strategic acquisitions.
The T-Mobile agreement with Shentel closes one of the final plot threads stemming from T-Mobile's blockbuster purchase of Sprint last year.
However, it also adds to the job cuts surrounding T-Mobile's acquisition of Sprint. Although the company pledged to add jobs rather than cut them as part of its transaction with Sprint, recent SEC filings from the company show that T-Mobile now employs 5,000 fewer workers than the two companies employed prior to their merger.
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