Sprint To Cut 4,000 Jobs, Close 8% Of Stores1/18/2008 9:26 AM Eastern
Sprint Nextel, continuing to bleed subscribers, said Friday that it in the next few months it plans to lay off 4,000 employees, or about 7% of its work force, and close 8% of company-owned retail locations.
The No. 3 wireless carrier, which provides the Pivot mobile phone service offered by four cable operators, said it had net losses of 683,000 post-paid and 202,000 prepaid subscribers in the fourth quarter of 2007. The company said it ended 2007 with about 54 million customers, compared with 53.1 million at the end of 2006.
In addition to the layoffs, Sprint plans to cut back on outsourced services and contractors. Sprint will close 125 of its 1,400 stores and eliminate more than 4,000 third-party distribution points. Currently the company has approximately 20,000 total distribution points, including its own stores.
The actions come after Sprint in October ousted CEO Gary Forsee, who had led the formation of the joint venture with Comcast, Cox Communications, Time Warner Cable and Advance/Newhouse Communications. The company last month appointed former Embarq CEO Dan Hesse to replace Forsee.
Sprint expects the job cuts and store closings to save between $700 million and $800 million per year by the end of 2008.
The moves are “a necessary step toward retrenchment,” Sanford Bernstein analyst Craig Moffett wrote in a report. “But they will do little to actually right the ship… the time for tune-ups has passed; major surgery is required.”
Moffett has suggested that the wireless carrier needs to move to one nationwide infrastructure, CDMA, and must simplify and “tighten a bewildering array of consumer brands and messages.”
Sprint said the employee headcount reductions are expected to be completed in the first half of the year and will include management and non-management positions throughout the company.
Sprint expects to announce fourth-quarter and full-year 2007 results on Feb. 28.