Sprint cuts 4,000 more jobs
NEW YORK -- The reduction announced on Friday is the first of what is expected to be a series of moves by the new CEO, Dan Hesse, as he tries to save the troubled wireless carrier. Sprint in January 2007 announced it was cutting 5,000 jobs. The company has 60,000 employees.
Most shocking to Wall Street, however, was the scale of customer losses: 885,000 during the fourth quarter alone.
Most of the losses came from the Nextel side of the company, said Jan Dawson, an analyst at Ovum. In its news release, Sprint did not break down the customer losses by brand.
Sprint said it lost 683,000 "post-paid," or subscription customers, and 202,000 prepaid customers during the quarter, which is traditionally the strongest for cellphone carriers.
Last year, Sprint lost 1.2 million customers. "It's going to be worse in 2008," predicted UBS analyst John Hodulik.
Sprint's "churn" — shorthand for the number of people who drop off each month — was also ugly: 2.3%. Verizon's churn is almost half that, 1.2%; AT&T isn't far behind.
Hodulik's assessment: "Sprint is losing market share, to put it mildly."
As for those 4,000 job cuts, "It's a good start." Hodulik predicted that more cuts would be needed.
Instead, Sprint stumbled as it tried to blend starkly different cultures of the two companies while trying to reconcile their incompatible wireless technologies.
Sprint wound up alienating customers, who bolted by the thousands. Sprint's dismal performance eventually cost Forsee his job. Hesse, a former AT&T executive with long ties to wireless, was recruited from a Sprint spinoff, Embarq, to replace him.
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