Massive customer losses bleed Sprint — MobileMonday Global: Industry News

^{Sprint Nextel to lay off 4,000} Massive customer losses bleed Sprint

20 Jan 2008 at 15:28 GMT Timo Poropudas

Sprint Nextel, the No. 3 carrier in US, announced it would cut 4,000 jobs and close 125 of its stores. Cutbacks follow the news about losing 683,000 postpaid subscribers and 202,000 prepaid users during the fourth quarter of last year.

Sprint Nextel said the move would save up to USD 800 million by the end of the year.

The company’s stock plunged more than 25 percent to USD 8.62 per share, reports RCR Wireless News.

The Wall Street Journal reported on the planned layoffs earlier this week.

This is the second time in a year that Sprint Nextel has cut thousands of jobs. The company laid off 5,000 employees in January 2007 after it reported significant losses on postpaid iDEN customers. The company counted about 60,000 employees before this latest cut, which is expected to be completed in the first half of the year.

The company will be closing 125 company-owned retail locations and 4,000 third-party distribution points, it announced. It has about 20,000 total distribution points, including nearly 1,400 company-owned stores.

In the fourth quarter, Sprint Nextel said it added 500,000 net subscribers through its wholesale channels, which typically include its mobile virtual network operator (MVNO) partners like Virgin Mobile USA Inc., Helio L.L.C. and Qwest Communications International Inc. However, with the loss of 683,000 direct postpaid subscribers and 202,000 customers to its traditional Boost prepaid service, Sprint Nextel ended up with a total loss of 109,000 subscribers. The carrier ended the quarter with 53.8 million customers on its network.

Sprint Nextel’s new CEO Dan Hesse, who gave up a seat on Nokia board, is also said to be considering a plan that would move the company’s headquarters back to Overland Park, Kan., which is where the carrier operated exclusively from before it acquired Nextel Communications Inc. in 2005.