How Sprint is working to hold onto Overland Park employees as T-mobile merger drags on

The last decade has been anything but stable for employees at Sprint Corp.

The wireless carrier has cut $6 billion in expenses in the last four years alone. Job losses — 15,000 in less than a decade — have mounted as the company has struggled to make a profit. And the undetermined fate of the proposed $26.5 billion merger with rival T-Mobile has cast even more uncertainty on the future of Sprint’s workforce in the Kansas City area.

Sprint officials know it hasn’t been an easy go, particularly since the regulatory review of the merger has dragged on longer than expected. And they say they’re working hard to keep employees on board as the company maneuvers the merger. The risk of attrition is even more pronounced during a booming economy and an ultra competitive labor market — the Kansas City metro had an unemployment rate of 3.3% in August, according to the Bureau of Labor Statistics.

To retain workers, Sprint guaranteed a minimum cash bonus for all non-commissioned employees this year. It’s also revived an annual incentive trip to Hawaii for top performers and invested in a program to recognize milestone employment anniversaries. Additionally, Sprint has doubled down on training programs, added a new company holiday for Veterans Day and added other perks like weekly social hours and modern office renovations.

“Retention is important,” said Chief Human Resources Officer Deeanne King, “and that’s part of the reason we’re doing all of this is to continue to show our people that we care.”

King said the merger saga has not drastically affected retention rates — nearly a quarter of Sprint employees have been with the company for 16 years or longer. But it has made things difficult as employees wonder whether they will have a job on the other side.

Both Sprint and T-Mobile have pledged that the merger will not result in major job losses. In fact, T-Mobile has said it will help create thousands of new jobs. And it has pledged to keep a second headquarters in Overland Park. But Sprint is making no guarantees to individual employees.

“I think people know that nobody knows right now,” King said. “I mean we just don’t know yet.”

That’s left company leaders to balance their desire to hold onto workers with a need to stay clear-eyed and transparent about an unknown future. King said the company plans no major changes in employment until the future of the merger is clear.

In the meantime, Sprint wants employees to focus on the things they can control.

“They can’t control whether or not they’re going to have a job tomorrow, but they can control whether or not they have a skill for tomorrow,” King said.

Over the last year, the company has invested more in employee training. In addition to motivational speakers and broad training programs, King said managers had placed a renewed focus on individual employee development plans.

“I want to take care of our people and let’s make sure they have the skills for the new company or for a new opportunity to go somewhere else if that’s what they decide to do,” she said. “Either way, it’s something that they can invest in and we can invest in with them.”

How the merger will affect jobs

Sprint and T-Mobile first considered a union in 2014, but that deal fell apart amid objections from federal regulators. The latest merger talks date back to at least 2017. In April 2018, CEOs from the two companies announced they had reached an agreement on the deal.

The U.S. Justice Department blessed the union in July of this year and three of five Federal Communications Commission members have previously voiced support.

The last remaining hurdle is an antitrust lawsuit waged by attorneys general in more than 15 states. A trial is set for December in New York.

In a letter this spring, Sprint CEO Michel Combes repeated T-Mobile’s pledge that the merger would be “jobs positive.” By 2024, T-Mobile expects to create 11,000 new jobs, including 1,000 new jobs at a new customer experience center in Overland Park.

That pledge has been met with skepticism, though. A primary benefit of corporate mergers and acquisitions is the potential savings companies can realize by eliminating duplicate functions and streamlining staff. And it’s rare that companies maintain two separate HQs.

“I think there’s no realistic expectation that Sprint will maintain a major presence in Kansas City once the Sprint/T-Mobile deal closes,” Jeff Moore, principal with wireless industry research firm Wave7 Research, recently told The Star.

It’s not just Sprint workers who are worried about the future: In September, T-Mobile retail employees and technicians sent a letter to Tim Hoettges, CEO of Deutsche Telekom, the majority owner of T-Mobile. In the letter, those workers sought assurances that their jobs and pay would be safe following the merger.

The Communications Workers of America has estimated the merger could cost as many as 30,000 Sprint and T-Mobile jobs. Aside from cutting 4,500 corporate jobs, the union projects the merged company would slash tens of thousands of retail positions, including 251 in Kansas and 474 in Missouri

Debbie Goldman, CWA’s research and telecommunications policy director, pointed to T-Mobile’s early pledge that an estimated $6 billion in cost synergies would help the new company disrupt the wireless marketplace.

“You’d have to believe I could sell you the Brooklyn Bridge to believe those synergies don’t mean job cuts,” Goldman said.

But Sprint has warned that it faces an even starker future without the merger.

“Without the merger, the trajectory for Sprint will worsen and Sprint’s prospects will be limited,” Combes wrote in an April letter to FCC Commissioner Geoffrey Starks. “Sprint will be forced to further reduce its operating expenses, which means more job reductions in Kansas City and throughout the company, and our future as a standalone company will be in jeopardy.”

Combes noted that the carrier’s prospects will affect the entire Kansas City region, where Sprint has significantly shrunk its workforce in recent years.

“Many jobs have been moved off-shore, and Sprint employees have endured rounds of layoffs, constant restructuring, and uncertainty about their livelihoods,” he said.

Many of Sprint’s workers in Overland Park tout technical skills coveted by other local employers, said Ryan Weber, CEO of the KC Tech Council. And other tech opportunities abound: the council’s recently released Tech Specs report showed that the demand for tech workers continues to outpace local supply — currently more than 3,000 jobs are unfilled in the area.

But even with the uncertainty, Weber believes Sprint’s technical workers have some motivation to stay put.

The advent of ultra-fast 5G technology presents a once-in-a-career opportunity for developers, he said, which can be reason enough to stay through the merger. T-Mobile and Sprint have said their merger will position the new firm to build out a nationwide 5G network.

“I think by this point, if you’ve stuck it out you’re pretty committed to the long term,” Weber said. “If I was an executive, I would look at the team that’s there and I’d be really excited about that.”

Improving morale in Overland Park

Sprint’s short-term incentive program is traditionally tied to a number of financial and performance metrics. But this year the company approved a guaranteed minimum bonus payment.

Generally tied to individual and company performance, the annual bonus can represent about 10% of a worker’s annual earnings. King said guaranteeing a minimum payout for all workers was a difficult decision as Sprint has built a pay-for-performance culture. But now employees can can earn even more with this year’s bonus if the company exceeds certain goals.

“This is a significant element of their compensation and to the extent that you can give them a minimum ... and guarantee that they will earn it, it plays a pretty high value in retention,” King said.

In recent times, the financial health of the company has inhibited Sprint’s ability to invest in its people and workplace. Sprint made money last year after the passage of corporate tax reform but the company has lost $25 billion over the last decade.

Many of the company’s benefit changes are what King describes as “no regrets” moves that will prove beneficial whether the merger is completed or not. King said T-Mobile, recognized last year as one of the nation’s best places to work, currently enjoys a better workplace culture than Sprint, though it aspires for parity.

“We’re just now starting to get some momentum in that direction,” she said. “I think T-Mobile is incredibly employee- and obviously customer-focused. We’ve said for a long time we’re employee-focused, but our actions didn’t always reflect that.”

Some of Sprint’s most popular changes have been relatively small ones.

The company now offers employee anniversary gifts from classic jewelry maker Tiffany & Co. and plays up big tenure milestones.

Recently completed renovations of Sprint’s main executive building replaced 1990s-era wood paneling and marble finishes with bright and modern aesthetic and an open office concept. But most popular among workers are the free jugs of fruit water on tap in the common area. Similarly, workers flock to weekly happy hours — which cost as little as $1 per employee.

“But it matters. It matters so much to people,” King said.

Likewise, Sprint reinvested in its annual employee incentive trips. Those reward roughly the top 1 percent of workers. While the trip used to go to Hawaii, it was scaled back in recent years to less exciting destinations in Florida or Texas. But starting last year, the company moved the trip back to the islands.

In recent years, Sprint’s twice-a-year employee experience surveys had shown declining employee morale. But King said those trends have largely reversed in the last few survey periods. Employees do report job uncertainty, but most say they want to work at Sprint in a year. And about 80 percent say Sprint is a great place to work.

“A company that has gone through and is going through what we’re going through — that’s really high,” she said.

King is a 30-year veteran of Sprint who has worked in several different departments. While the company’s future is unknown, she said most employees have embraced the merger as an important step forward.

“Watching this company come back to life and the energy that is getting created here has been so rewarding,” she said. “I just continue to be in awe of the engagement and the commitment of the people in this company despite all this uncertainty.”

Related stories from Kansas City Star

Kevin Hardy covers business for The Kansas City Star. He previously covered business and politics at The Des Moines Register. He also has worked at newspapers in Kansas and Tennessee. He is a graduate of the University of Kansas