Published in News
4,000 jobs gone, stores to close
by David Stellmack on21 January 2008
Belt tightening finally at hand for Sprint
Sprint/Nextel has announced that it will be cutting close to 4,000 jobs and closing about 125 retail store locations in response to a loss of customers. Sprint/Nextel stock took a serious 25% nose dive in trading based on the news.
The layoffs and store closings will take place during the first half of this year, and it is expected to save the company about $700 to $800 million in labor costs alone. However, some industry analysts are saying that these cuts are not deep enough to stop the bleeding from a fourth quarter loss of nearly 683,000 subscribers.
Sprint/Nextel’s “churn” rate has remained quite high, which continues to be a problem for the company. (Churn rate is the rate at which subscribers cancel service and are likely moving to another provider.) Analysts suggest that Sprint/Nextel needs to make deeper cuts and improvements in marketing to set the company apart from being viewed as another “Me, Too” provider.
In addition, many have suggested that additional consolidation needs to take place between the old Nextel side of the house and the current Sprint side. It has been suggested that the company should be able to find some additional cost savings to help improve its situation beyond what they are already suggesting that they are going to do.