T-Mobile Layoff 2026: What Employees Need to Do This Week

A layoff notice from T-Mobile starts five time-sensitive clocks that most employees don't know about. On August 26, 2026, T-Mobile announced layoffs across eight Washington cities, with six locations scheduled to close as part of a company restructuring. The total number of employees affected hasn't been disclosed. What is clear is that every affected employee now has a set of hard deadlines, and missing any one of them can cost you thousands of dollars.

This article covers those deadlines in the order they arrive. Use it as a working checklist.

What happened

T-Mobile announced on August 26, 2026 that it is laying off employees across retail and operational locations in eight Washington cities. Six of those locations are slated for closure. The company has not disclosed how many employees are affected. The restructuring spans multiple roles across the impacted sites.

File for unemployment today

Unemployment insurance is a state-administered benefit that replaces a portion of your wages while you search for work. In Washington, you file through the Employment Security Department (ESD) at esd.wa.gov.

File on or before your last day of work, or as close to it as possible. Washington processes claims from the week you file, not the week you were laid off. Waiting a week to file means losing a week of benefits you can't get back.

Washington's maximum weekly unemployment benefit is $1,019 as of 2026.¹ Your actual benefit depends on your wages in the base year period. The ESD site has a benefit estimator you can use before you file.

A few things to have ready when you file: your Social Security number, your T-Mobile employment start and end dates, the reason for separation (layoff or reduction in force), and your banking information for direct deposit. Washington uses ID.me for identity verification, so you may need to complete that step after you submit your initial claim.

There's no waiting week penalty in Washington for most layoffs, but delays in filing create delays in payment. File now.

What should you do about health insurance?

Health insurance is one of the most time-sensitive decisions after a layoff, and it has two separate deadlines running at the same time.

The first option is COBRA. COBRA lets you keep your T-Mobile health plan for up to 18 months after separation. You have 60 days from your qualifying event (your last day of employment) or the date you receive the COBRA election notice, whichever is later, to elect coverage.² If you elect COBRA, your coverage is retroactive to the day after your T-Mobile coverage ends. That means you can wait until you actually have a medical expense before electing, as long as you're still inside the 60-day window.

The cost is the full premium, which is both the employee and employer share, plus a 2% administrative fee. The average individual COBRA premium in 2026 is $703 per month.³ That's the realistic cost to compare against your alternatives.

The second option is the Health Insurance Marketplace. Losing employer coverage is a qualifying life event that triggers a Special Enrollment Period (SEP) of 60 days.⁴ Washington runs its own Marketplace at wahealthplanfinder.org. Depending on your income for the rest of 2026, you may qualify for premium tax credits that make Marketplace coverage significantly cheaper than COBRA.

Run the numbers on both before you decide. If you're healthy and the next open enrollment is close, a short-term bridge plan might also be worth pricing. But don't let either 60-day window lapse without making a choice.

Should you sign your severance agreement right away?

No, and the law actually gives you time.

A severance agreement is a legal contract. In exchange for severance pay, you're typically asked to release claims against T-Mobile, including potential age discrimination claims under the Age Discrimination in Employment Act (ADEA).

If you're 40 or older, the Older Workers Benefit Protection Act (OWBPA) requires that T-Mobile give you at least 21 days to review the agreement before signing.⁵ Because this is a group layoff affecting multiple employees, the OWBPA review period extends to 45 days.⁶ This is a federal legal requirement, not a courtesy. T-Mobile can't shorten it.

After you sign, you have 7 additional days to revoke your signature.⁷ The agreement doesn't become binding until that revocation window closes.

Use this time. Read the agreement carefully, or have an employment attorney read it with you. Look at what claims you're releasing, what the severance amount actually is, whether there are non-compete or non-disparagement clauses, and whether the company will provide a neutral reference. Some terms in severance agreements are negotiable, especially the non-compete language and the reference policy. You won't know until you ask.

If you're under 40, you don't have the same statutory review period, but there's still no legal obligation to sign immediately. Don't let urgency pressure you into signing before you understand what you're agreeing to.

What about your T-Mobile stock and equity?

T-Mobile is a publicly traded company, so equity is a real consideration for many affected employees. The rules differ depending on what type of equity you hold.

If you hold Incentive Stock Options (ISOs), you have 90 days from your termination date to exercise them and keep the favorable ISO tax treatment under IRC Section 422.⁸ After 90 days, unexercised ISOs convert to Non-Qualified Stock Options (NQSOs), which are taxed as ordinary income at exercise instead of potentially qualifying for long-term capital gains treatment. Check your grant agreements for the exact expiration terms.

One important note on ISOs: exercising ISOs doesn't create regular income tax, but it can trigger Alternative Minimum Tax (AMT). If T-Mobile's stock has appreciated significantly above your strike price, talk to a CPA before exercising a large block of ISOs. The AMT exposure can be substantial.

If you hold Restricted Stock Units (RSUs), unvested RSUs generally forfeit on your termination date. Any RSUs that vested before your last day are yours and have already been treated as ordinary income. Check your equity platform (likely E*TRADE or Shareworks for T-Mobile employees) to see what's vested versus unvested.

Don't assume anything. Pull up your grant agreements and confirm the exact terms before your system access is revoked.

What does severance do to your taxes?

Severance pay is ordinary income. It's taxed the same way your regular paycheck was taxed, with one catch: the IRS treats severance as supplemental wages, and T-Mobile is required to withhold at a flat 22% federal rate on the first $1 million of supplemental wages.⁹

If your total income for 2026 puts you in a higher marginal bracket, that 22% withholding won't cover your full tax liability. You may owe more at filing time, or you may need to make an estimated tax payment to avoid an underpayment penalty.

The Q3 2026 estimated tax payment is due September 15, 2026.¹⁰ If your severance hits in August or September, that deadline is relevant. Use the IRS withholding estimator at irs.gov to run a quick calculation. Washington has no state income tax, so you only need to worry about federal here.

Also check your final pay stub. Some employers get the withholding math wrong on severance, either under-withholding or over-withholding. If it looks off, flag it now rather than sorting it out in April.

What should you do with your 401(k)?

A 401(k) rollover is the process of moving your retirement savings from your T-Mobile plan to another qualified account after separation. You have three main options.

First, you can leave the money in T-Mobile's plan, at least temporarily. Most plans allow former employees to keep funds in the plan if the balance is above $5,000. This is the lowest-friction option short-term, but you'll lose access to plan-specific investment options and may pay higher administrative fees over time.

Second, you can do a direct rollover to an IRA or a new employer's plan. In a direct rollover, the funds move institution-to-institution. No taxes are withheld, no deadlines are triggered, and the money stays invested. This is generally the cleanest option for most people.

Third, you can take an indirect rollover. T-Mobile sends you a check, you deposit it into an IRA or new plan within 60 days.¹¹ T-Mobile is required to withhold 20% for federal taxes on any indirect distribution, so you'd need to deposit the full original amount (replacing the withheld 20% out of pocket) to avoid it being treated as a taxable distribution. Miss the 60-day window and the whole distribution becomes taxable income, plus a 10% early withdrawal penalty if you're under 59 and a half.

Don't cash out your 401(k) to cover expenses unless it's your last option. The tax and penalty hit on a cash-out can consume 30% or more of the balance. Exhaust your severance, unemployment benefits, and other options first. You can also access your post-layoff checklist to see how these decisions fit into your full timeline.

Deadlines and rules described here reflect federal law and general state guidelines as of the article date.

The Layoff Guide

The deadlines above apply whether or not you are tracking them. The Layoff Guide from Layoff HQ is a 33-page field guide that covers all twelve post-layoff deadline events in the order they arrive: unemployment, the severance review and revocation windows, COBRA and the Marketplace, your FSA, your equity window, your 401(k), and your taxes. Each event comes with timed checkpoints, the decision math, and the one mistake that costs people the most, plus a fill-in worksheet that turns your last day worked into your complete personal deadline calendar. One-time purchase. No subscription. Instant download, with a 14-day full refund if it is not useful.

Get The Layoff Guide, $39 or build your free Decision Calendar.

1. Washington State Employment Security Department. "Calculate Your Benefit." esd.wa.gov.
2. U.S. Department of Labor. "COBRA Continuation Coverage." dol.gov.
3. Kaiser Family Foundation. "Health Policy 101: Employer-Sponsored Health Insurance." kff.org.
4. HealthCare.gov. "Special Enrollment Period." healthcare.gov.
5. U.S. Equal Employment Opportunity Commission. "Age Discrimination in Employment Act of 1967 (ADEA)." eeoc.gov. (21-day individual review window.)
6. Ibid. (45-day group termination review window.)
7. Ibid. (7-day revocation right.)
8. Internal Revenue Service. "About Publication 525." irs.gov. IRC Section 422(a)(2).
9. Internal Revenue Service. "Publication 15 (Circular E), Employer's Tax Guide." irs.gov.
10. Internal Revenue Service. "When to Pay Estimated Tax." irs.gov.
11. Internal Revenue Service. "Rollover Chart." irs.gov.