T-Mobile To Lay Off Thousands Of Workers After Taking Millions In Taxpayer Subsidies For Job Creation

Image: Pat GarofaloLast week, telecom giant T-Mobile announced that it plans to close seven of its 24 U.S. call centers. About 3,300 employees work at those centers, and the company is planning to lay off at least 1,900 of them, while offering transfers to some (though it doesn’t yet know how many). Adding insult to injury, four of the centers that T-Mobile is closing received taxpayer subsidies worth millions of dollars, according to Good Jobs First:

– Frisco, TX: $3.7 million

– Brownsville, TX: $5.3 million

– Lenexa, KS: $3.9 million

– Redmond, OR: $1.3 million

These subsidies took several forms, including sales tax exemptions, salary supplements for workers, and job training money. “T-Mobile USA’s decision to close seven call centers, employing 3,300 workers, is a bad one. It harms workers and communities, and in several locations, abuses taxpayers who provided funds to the company in exchange for employment and economic development,” said the Communication Workers of America.

T-Mobile is certainly not the first corporation to receive subsidies and then cut a community loose. Mega-manufacturer Boeing took a heap of taxpayer money and received significant local help in winning a $35 billion contract before bailing on Wichita, Kansas. Sears will lay off 100 workersafter receiving millions from Illinois (and can lay off another 1,750, thanks to the terrible terms to which Illinois agreed).

Fortunately, several of the subsidies received by T-Mobile came with clawback provisions, so officials in the states affected at least stand a chance of recouping some of the money they’ve lost. “The officials in those states should investigate the possibility of recapturing as much of those millions of dollars that were paid out as possible,” said Phillip Mattera, Research Director of Good Jobs First. “The taxpayers didn’t get all that they paid for. They lost those millions of dollars in revenues in the expectation that permanent jobs would be created.”

This blog originally appeared in ThinkProgress on March 26, 2012. Reprinted with permission.

About the Author: Pat Garofalo is Economic Policy Editor for ThinkProgress.org at the Center for American Progress Action Fund. Pat’s work has also appeared in The Nation, U.S. News & World Report, The Guardian, the Washington Examiner, and In These Times. He has been a guest on MSNBC and Al-Jazeera television, as well as many radio shows. Pat graduated from Brandeis University, where he was the editor-in-chief of The Brandeis Hoot, Brandeis’ community newspaper, and worked for the International Center for Ethics, Justice, and Public Life.

Tracking image for JustAnswer widget
Tracking image for JustAnswer widget
Scroll to Top

Madeline Messa

Madeline Messa is a 3L at Syracuse University College of Law. She graduated from Penn State with a degree in journalism. With her legal research and writing for Workplace Fairness, she strives to equip people with the information they need to be their own best advocate.