Sprint Adds 2,500 More Layoffs to Its Roster

Kelly Teal, Contributing Editor

November 9, 2009

2 Min Read
Sprint Adds 2,500 More Layoffs to Its Roster

Five days after announcing dozens of layoffs in its wholesale unit, Sprint Nextel Corp. (S) said it’s cutting hundreds more jobs – up to 2,500 – by the end of the year.

Wall Street applauded the news by boosting Sprint’s stock price more than 20 percent; Sprint shares closed at $3.43, up 58 cents, on Monday.

The nation’s third-largest carrier, which recently reported third-quarter losses of $478 million, said on Nov. 9 the reductions will slash labor costs by at least $350 million.

Sprint announced the latest job cuts the same day it said it will pump another $1 billion into its WiMAX partnership with Clearwire Corp.

The Kansas City-based service provider will cut between 2,000 and 2,500 jobs by Dec. 31 in various, unspecified locations. Sprint said contractor, other third-party and internal positions all are affected. However, Sprint said, executives will act “in a careful manner to ensure that there is no impact on the improved customer experience that has been reflected in much higher levels of satisfaction in customer surveys and in independent performance tests,” the company said in a press release.

Sprint has found itself included in the MSN Hall of Shame for poor customer service more than once since the Nextel takeover. But especially after Dan Hesse’s appointment as CEO, Sprint has worked to improve its tarnished reputation and on Monday, said it’s noted “increased customer satisfaction” from better service for seven sequential quarters. Because of that, Sprint said it has closed 27 call centers as call volume has fallen amid improved service.

Sprint said the layoffs are part of its strategy to remain competitive. The provider is finding itself bested by rivals offering niftier smartphones such as the Apple iPhone and the Motorola Droid. The Palm Pre hasn’t gained the traction Sprint banked on earlier this year. Plus, the company said in its press release, the economy remains “challenging” and Sprint wants to keep stockpiling cash through the fourth quarter.

Nonetheless, Sprint will give its employees severance packages and help them find other jobs through outplacement services. Sprint expects to take charges of between $60 million and $80 million in 2009’s fourth quarter for layoffs.

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About the Author(s)

Kelly Teal

Contributing Editor, Channel Futures

Kelly Teal has more than 20 years’ experience as a journalist, editor and analyst, with longtime expertise in the indirect channel. She worked on the Channel Partners magazine staff for 11 years. Kelly now is principal of Kreativ Energy LLC.

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