Sprint Nextel to cut 4000 jobs

Sprint Nextel announced job cuts and retail-outlet closures in the wake of more subscriber losses.

During the fourth quarter of 2007, Sprint Nextel lost 683,000 post-paid subscribers and 202,000 of its traditional pre-paid customers, which offset subscriber gains the company realized through its wholesale channels — a trend that has existed during most quarters since Sprint merged with Nextel in 2005. Amid customer concerns regarding voice quality on the iDEN network, subscriber losses led to the ousting of former CEO Gary Forsee, who was succeeded by Dan Hesse in December.

Projecting continued losses in 2008, Sprint Nextel announced plans to streamline the company that include about 4000 job reductions during the first half of the year and cutbacks in outsourced services and contractors. The company expects to eliminate about 20% of its total distribution points, including 4000 third-party locations and 125 company-owned retail centers.

In a press release, Sprint Nextel projected the cuts will save the company more than $700 million per year. But wireless industry consultant Andrew Seybold questioned the benefit of layoffs. Even with its current headcount, the carrier is struggling to maintain its CDMA and iDEN networks while tackling the nationwide rebanding of 800 MHz spectrum and the initial deployment of WiMAX networks.

“They took on too much,” Seybold said. “I’m not sure that layoffs or anything helps until they get back to basics and their customers feel wanted again. They need to take care of business and stop the bleeding on the Nextel network.”