Sprint Nextel said it plans to eliminate 4,000 jobs and shut down 8 percent of its retail locations in an effort to save up to $800 million a year. The carrier will close 125 company-owned stores and more than 4,000 third party distribution points out of its 1,400 owned stores and 20,000 distribution points. The layoffs should be complete by the first half of this year. Sprint eliminated 5,000 positions last year. Sprint predicts that it lost 683,000 post-paid subscribers during its Q4 and 202,000 prepaid users.
In a note to investors, Walter Piecyk of Pali Research wrote: "Fundamentals continue to worsen [at Sprint], there is no plan of resolution and we believe firing 4,000 people will not solve any of the company's problems... We expect the company to lose 2.3 million customers in both 2008 and 2009 and ARPU to come under increased pressure from increased competition in a slowing market and slower growth in data."
For more on Sprint's announcement:
- read this WSJ article (sub. req.)