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Sprint lays off 4,000, restructures amid customer defections

Sprint Nextel said Friday it plans to lay off 4,000 workers, close 125 of its retail locations and restructure operations in an effort to save $700 million to $800 million by the end of 2008.The restructuring is the first move for new CEO Dan Hesse, who jointed Sprint Nextel Dec.
Written by Larry Dignan, Contributor

Sprint Nextel said Friday it plans to lay off 4,000 workers, close 125 of its retail locations and restructure operations in an effort to save $700 million to $800 million by the end of 2008.

The restructuring is the first move for new CEO Dan Hesse, who jointed Sprint Nextel Dec. 18. It also plans to take a goodwill writedown. The company said in a statement that it anticipates "continued downward pressure on subscriber trends, revenues, and profitability in 2008."

Given Sprint Nextel's customer service woes of late--cutting off people because they call the help line too often and billing dead people--it's not surprising that the company has problems.

In addition to the layoffs, Sprint Nextel said it would eliminate 4,000 third-party distribution points and cut back on contractors and outsourced services.

Sprint Nextel also released a few operating details. Among them:

  • Sprint Nextel had a net gain of 500,000 subscribers through its wholesale, Boost Unlimited and affiliate channels, but those gains were offset by defections. Sprint lost 683,000 post paid subscribers and 202,000 traditional pre-paid users.
  • Churn was 2.3 percent.
  • Sprint Nextel had a subscriber base of 53.8 million at the end of 2007.

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