The company responsible for mobile sales at Costco warehouses across the country, Wireless Advocates, abruptly shut down on Monday, according to multiple employees on social media.
“As of this morning wireless advocates has ceased operations effective immediately and is no longer doing business," an email sent to Costco employees on Monday reads, according to Victor Valley News Group. The local outlet also reported that all Costco kiosks ceased operations, with Wireless Advocates laying off more than 1,800 employees. In wake of the closure, the company's website appears to have been shut down.
Wireless Advocates operated 535 cellphone kiosks at Costco and 65 kiosks at various military bases — according to the company's website, which was taken offline on Monday — selling mobile phones and wireless plans in partnership with companies like Verizon, AT&T, and TMobile.
"This morning I need to share the unhappy news that Wireless Advocates is permanently closing, effective immediately," Wireless Advocates CEO Dan Brettler said on a call posted to YouTube.
In addition to supply chain issues and a lack of consumer interest in 5G, two factors behind the sudden closure, Brettler said that Wireless Advocates also suffered after canceling its contract with military bases and losing its contract with Costco, which was moving in a "different direction."
"When you combine our exit from military and Costco's change in business model, it left us, unfortunately, with no other choice," Brettler explained.
On Reddit, an r/Costco moderator and multiple employees told a different story, alleging that Wireless Advocates ended its relationship with Costco.
“Just to clarify, Wireless Advocates ceased operations and chose to end its partnership with Costco. It appears Costco was not aware this was going to occur,” a moderator replied to a post announcing the news on Monday.
Former Wireless Advocates workers and current Costco employees on social media were critical of the company's decision to lay off employees weeks before the holidays.
"(Brettler) has always been concerned with himself and no one else," an employee wrote on YouTube.
A Costco employee added, "Holidays are famously the most profitable time for this company, to shut down during this time is a HUGE representation of the upper-managements (sic) slow but sure giving up on their company."
Another commenter wrote that "Dan Brettler will have his day in court" for violating The Worker Adjustment and Retraining Notification (WARN) Act.
If a private company is large enough, the WARN Act mandates that employees receive notice 60 days before mass layoffs or plant closings. If businesses don't comply, employees can seek damages for back pay and benefits.
Cheapism reached out to Costco and Wireless Advocates for comment and will update here if and when we hear back.