Sprint Announces Layoffs for October Costing the Company $160 Million

Six weeks ago, new Chief Executive Officer, Marcelo Claure, was appointed at Sprint. He immediately started his plans to change around the business, which has been losing subscribers and gained a reputation for sluggish network service, indifferent customer services and poor value for money. In this time, Sprint has reignited something of a price war such as earlier in this week, seeing AT&T’s double data offering and introducing their own offers. We’ve already seen worker layoffs before Marcelo’s arrival; back in March the company closed 55 stores around the country with the loss of over three hundred jobs. Unfortunately, we’ve not see the last of the job cuts; Yesterday, Sprint announced more to come in October.

Sprint, “the Company,” made a regulatory filing that said, “The plan is expected to include steps to, among other things, improve operational efficiencies and reduce costs, as a result of which the Company expects to incur material charges under generally accepted accounting principles. This planned reduction is expected to be largely completed by October 31, 2014 and will include certain management and non-management positions.” The job cuts are expected to cost $160 million and the filing goes on to explain that they may well be further job cuts to come but declined to provide any further detail.

Sprint is facing pressure from the two largest US networks, Verizon and AT&T, which have stronger networks but tend to react rather than be proactive in the market. It’s also facing pressure from smaller player T-Mobile USA, which appears determined to upset the applecart. Sprint’s Marcelo Claure has promised to turn the business around by slashing prices and cutting costs. Sprint has the advantage of rich parents as it is owned by Japanese giant, SoftBank, which could bring the advantage of economies of scale. We also know that Sprint are working to improve their struggling network and have abandoned short term plans to blanket the US in their 2,500 MHz high frequency network, instead planning to smartly focus this higher speed network in a few select cities and essentially play to their strengths at a local level. What do our readers think? Are their great offers enough to entice you? Or do you want to see some high speed 2,500 MHz LTE coverage in your area, first?

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