Sprint Nextel seeks more layoffs - report Wireless carrier may lay off 'a few thousand' following earlier cuts The new chief executive of Sprint Nextel Corp. reportedly plans to lay off "several thousand" workers as part of an effort to reduce costs at the struggling wireless-phone company, which has been losing thousands of key subscribers to rivals. Longtime telecommunications veteran Dan Hesse, who was hired as CEO last month, aims to tighten control over corporate expenses and demonstrate new urgency to investors about Sprint's seriousness in improving the company's fortunes, according to an article printed in the online edition of The Wall Street Journal's online edition on Monday afternoon. Sprint which has around 60,000 employees, already cut its payroll by about 5,000 jobs last year. In addition, the Journal said Sprint may consolidate its base of operations in its historic home of Overland Park, Kansas. The company also has headquarters in Reston, Va., a location acquired via Sprint's 2005 acquisition of Nextel Communications. Sprint officials could not immediately be reached for comment. Hesse joined Sprint shortly before the company spun off its local-phone business in 2006. He was brought aboard to shepherd the phone division, now called Embarq Corp, though its journey to become an independent company. At Embarq, he showed a talent for tight cost controls and strong marketing - both areas where Sprint has fallen short. The former CEO of Sprint, Gary Forsee, resigned under pressure in October amid falling sales and the migration of customers to rivals. Although investors are sure to applaud Sprint's renewed efforts to cut costs, analysts say the company has probably lost more customers to competitors such as AT&T Inc.and Verizon Wireless , the two largest U.S. mobile operators. Bear Stearns, for example, said last week in a report that Sprint could lose 550,000 postpaid subscribers in the fourth quarter, up from its prior estimate of 325,000. The firm also said the decline "could be worse." In the most recent third quarter, Sprint lost a net 60,000 customers, including 337,000 postpaid subscribers. And in the past five quarters, Sprint has lost more than 1.03 million postpaid customers. Postpaid customers sign up for annual plans and pay at the end of each month. They are considered the most valuable in the industry. Sprint still caters to nearly 54 million subscribers, but AT&T and Verizon have widened their lead and now serve more than 64 million customers apiece. While cutting costs will help, analysts say Hesse's biggest challenge is finding a way to keep Sprint's customers from defecting. The company has been plagued by poor customer service and a less attractive roster of exciting handsets compared to its competitors such as AT&T, the exclusive provider of the iPhone. Sprint Nextel reportedly planning more layoffs - MarketWatch
Sad state of affairs Sprint is in these days. If the majority of those laid off are on the CSR side, watch this situation explode out of control. 45minute to two hour waits for everyone who calls in - standard. This might PO a few customers, but I think Hesse needs to stop management from giving away the farm when customers whine. He needs to keep their pricing plans currently available to the public consistent across the board with only flexibility going to long time customers who have paid their bills on time. All these new customers getting SERO on top of their corporate discounts with free 5pm nights and free everything needs to stop. Leave the bottom feeders to prepaid until they can get jobs and pay their monthly bills themselves.
Sprint has a pretty good network in the areas they cover. Most people I know hate the customer service that appears to be in India. Shut down the India call centers and bring the jobs home.
I've been to their corporate HQ in Reston several times and my impression is that for most of the employees English is not their primary language. It is entirely possible that their CS is actually in the US. If Sprint discontinues the SERO their net losses of customers would be much worse. Unfortunately that company needs a lot of work, and they are going to get worse before it gets better. You are right about giving away the farm to customers who whine. Most customers who complain and threaten to leave have no intentions of doing so. I know from my own business that there are many customers who make a fuss, and when we don't cave threaten to never come back. I actually make a notation of people who say they are never coming back again in the computer. I'd say that 80 - 90% of them still come every week. I'm sure the same goes for Sprint. Most of the customers they give credits to would stay anyway. -Jay
I think they really hit it out of the park right there. That is exactly what's wrong. But also I think their marketing strategy hasn't been great as well. Sprint has a great product to offer but need to tie up these other loose ends to go with it.
While having a less exciting lineup of handsets is a factor, I don't think that alone is the reason for their incredible churn rate, and net loss of customers each quarter. -Jay
or had converted their customers and network to CDMA..? hard to say, but i think you are definetly hitting around one of the main factors. iDEN was a great technology and concept but not converting their people and trying to juggle 2 different companys hasnt been and never was successful for them.
That's a very good point. Had they transitioned their Nextel customers to a CDMA based PTT platform and not had the burden of operating 2 totally different networks they would probably be more profitable. -Jay
How long do you think it'll take to transition customers to from iden to cdma? Sprint doesn't cover all the areas Nextel does so you wouldn't necessarily want to force people without significant network expansion.
They don't seem to be in any rush to get this done. Unless they make consolidating their network a priority like ATT/Cingular did they won't get it done anytime soon. ATT made it a priority to get people off of TDMA, and to consolidate their customers customers from mergers into their own billing and CS system to keep costs down. -Jay
Wirelessly posted (Walkguru's: Nokia6555b/2.0 (03.31) Profile/MIDP-2.1 Configuration/CLDC-1.1 UP.Link/6.3.1.17.0) Sprint never was any good where i live.
Well, lets put it this way. I live in the DC area, about 5 miles from their headquarters. I've only known one Sprint customer and a small handful of Nextel customers. The people I knew on Nextel were always dropping out or were staticy when I talked to them. I remember in one instance we were travelling down rt 7 right beside a friend on Nextel. I had perfect signal on my Cingular phone, but the connection was so staticy we could barely talk. They don't have a good network within a few miles of their headquarters. That is the reason most people I knew on Sprextel switched - Network issues. If you combine Network issues with a lack of interesting handsets, maybe a few billing errors thrown in you got a good reason to leave when out of contract. -Jay
Ah well I am so glad you stated personal experiences about where you live. You know that would be one reason to leave a company if they just dont cover then they dont cover.
I think Sprint should have built synergy sites were they could and in Affliate markets they could have sold of those Nextel assest to other carriers Like ATT and Verizon due. This way Sprint could have avoided the millions of dollars wasted on Courts cost and could have re-couped some of the post merger expenses.
Back to the original topic, I feel sorry for the employees getting layed off that sucks. The CS that need attention will get another hit as Sprint will probably cut those entry level jobs first.
I don't think having two independent networks is the main reason they are defecting so many customers, but it has contributed to it. The main reason for customer defection is customer service. I can't stress that enough. Another thing is they can't possibly transition those Nextel customers to CDMA without having some PTT that works as good on the CDMA side. A quick transition would upset many Nextel customers too. The root of the problem is the nature of this merger. Sprint is now forced to get phone manufacturers to come up with strictly proprietary CDMA phones that also support IDEN, something that nobody else in this world has! This obviously locks them out of the nicer phones Verizon is now offering, so their marketing also suffers as a result of this very peculiar merger of "not equals". So I guess this answers the question if they had been better off not buying Nextel. I think so too. They would not have as many customers, but they would've been much healthier if they had left Nextel alone. I've said this for a long time. The Nextel merger was a mistake. The Cingular/AT&T merger excecution was much more successful because they weren't trying to mix oil and vinegar. But with better management and planning, they could've pulled off this merger in a much better way. They should've concentrated more efforts in customer service, merging IT systems and consolidating backend platforms making it easier for CS people to answer customers questions and solve billing issues. That translates into less confusion, less customer hold times and happier experiences for both customers and customer service agents. They could ride the two networks alongside without having to have two separate divisions for customer service, one for Nextel and another one for Sprint. Can Mr. Forsee explain why over two years after the Nextel merger, a single Sprint customer service agent still cannot offer help to both Sprint and Nextel customers? This is the same problem that drove the former AT&T Wireless to the ground. They had the company split in two divisions, one for TDMA and another for GSM. That was a nightmare for customer service! Sprint made the same mistake by maintaining CS split into Nextel and Sprint divisions. They should've merged those CS camps a long time ago.
Forsee thought that a Nextel absorption would give Sprint an instant acquired customer base that they would never be able to achieve organically. I believe he felt that he had to do something huge or risk being permanently behind Verizon and AT&T forever. Investors were paraded with big promises that were not all realized. I don't think that even Forsee envisioned the mess that would become of this. Sprint has tried the "let's be different game," and it hasn't worked. Hopefully they can reorganize themselves back into a solid, respectable and formidable player even if it means accepting and conceding their role for dominance. I still think that Sprint should pursue what it does best - that is leverage their wholesale status and become a pure-play wholesale service provider. They could sell only to businesses and resellers and make a killing. But what do I know?
It seems every threaed about Sprint winds up being about their bad reputation. Can we make just one "What's the problem with Sprint?" thread so all the armchair CEO's can have a place to go throw the ball around? This topic is about Sprint firing a few thousand employees. This looks like a knee-jerk reaction to their under-performance and tanking stock prices. Their investors are nervous, so they get a new CEO and he lays off a bunch of employees (Corporate Rescue 101). This makes investors happy and stops some blleding in the short-term, but unless it's part of a new over-all strategy by Sprint, they are only hurting themselves. I'm sure these thousands of employees were contributing something to the company.
Well we have a long history of Nextel bashing, even before the merger... http://forums.wirelessadvisor.com/t...-rant-reasons-i-hate-nextel-3.html#post105849 . As far as having to get the manufacturers to make combined CDMA/iDEN phones goes, why can't they carry some cool CDMA only phones? Not every phone ATT sells is PTT compatible, why can't Sprint do the same? -Jay
And that's not a bad thing. Look at T-Mobile. They're doing much better than Sprint. Because then every Nextel addict will complain that the "cool" phones don't have PTT and they MUST have PTT or they'll die. This will also slowdown the transition from IDEN to CDMA.
Great point about Sprint needing to have a well-performing PTT system on CDMA before they can transition NEXTEL customers over to the CDMA side, BUT look at how many millions of NEXTEL subscribers have left the company completely since the merger happened. A lot of people and companies have figured out that PTT can be essentially replaced by simply using M2M minutes or SMS. I know a lot of construction people who used to depend on NEXTEL for PTT, well now they're on AT&T...without any sort of PTT feature. For a lot of people, PTT is not as important as it used to be, and Sprint cannot even retain those people, who don't need PTT.
The problem with PTT on not-Nextel is that you can't use it with Nextel Direct Connect. Half the people I use Direct Connect with aren't within the same organization. People in our org who don't use the PTT feature cost us a lot more because we have to pay for their cell minutes. Unlimited Direct Connect comes with plan. We've looked at switching from Nextel but it just ends up costing us a lot more with our usage.
There should be some means for PTT to be routed to other carriers, just like SMS can be sent to others on other carriers. -Jay
It should get better now that the carriers are going to an IP based POC. Basically you would have to have some sort of iDEN SMR to IP routing protocol. But thats not going to happen. AT&T has a decent POC thats not much slower than Nextel. Alot of people had Nextel back in the day because they had dirt cheap plans for DC and businesses could us the DC function rather that building and maintaining their own Repeater system. Now that pretty much every carrier has alot better rate plans it doesnt pay to have a cheap rate plan for DC with only a couple hundred minutes for actual TDMA based calls. Tmobile always stays pretty solid as they dont stir up the water that much and stick to what they know. The riskest thing they have done is pick up some freq spectrum for UMTS. I know its off topic but it should be a lesson that Sprint learns to not break out of the norm so much until they get into the positive numbers. IMO no disrespect to you Sprinters out there but I think Sprint should sell off any Nextel properties that are in Affiliate Areas for example iPCS area. They should change their Name and spin off the WiMax division to another Wimax start up company and either progress to UMB or go the LTE route.
I think that's the best solution I've heard to date for their problems, however you know they would never go through with it. -Jay
There alot of pride involved and alot of feeling that will get hurt, but if they want to survive I think this is the way its gotta be.
Besides just doing it in affiliate areas, a very shrewd, but probably very successful business move would be to spend the next year trying to convert as many Nextel users over to Sprint as possible. Then, spin off Nextel with a large portion of Sprint/Nextel's debt and change the name of Sprint. But that may violate a law, I don't know! Business law never was my strong suit! :browani: