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.