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Sprint axes (at least) 2,000 (more) jobs

Extra call centers? Who needs 'em?

Designing a Defense for Mobile Applications

Sprint Nextell announced Monday that it will eliminate between 2,000 and 2,500 positions by the end of this year.

The third largest US wireless provider - which cut 8,000 workers earlier this year - took a different angle on the layoffs, however. According to their announcement, the more-important metric is that the company "will take actions in the fourth quarter of 2009 to reduce internal and external labor costs by at least $350 million."

Those savings may be welcome news to investors, but they're cold comfort to the thousands of employees whose holiday vacations will now be transformed into job-hunting slogs at a time when US unemployment has topped 10 per cent.

Sprint's announcement also notes that due to "increased customer satisfaction ... the company has been able to discontinue the use of 27 call centers as call volume has decreased in the wake of service improvements." With fewer customer calls, it seems, fewer call center minions are needed to field them.

There's another reason for that drop in customer-service demand, however. In the company's 10-Q form filed with the US Securities and Exchange Commission last Friday, Sprint Nextel notes that their wireless subscribers had dropped from from 39.7 million in the quarter ending March 31, 2008 to 33.6 million at the end of the most recent quarter. Fewer customers require fewer service calls.

But that filing puts a shiny gloss on that shrinkage, as well. "Net post-paid subscriber losses of 991,000 for the second quarter 2009 and 801,000 for the third quarter 2009," they report to the SEC, "reflect sequential improvements of approximately 20% per quarter."

Things may be bad, that is, but they're getting worse more slowly than before.

Add to Sprint's woes the fact that the company is investing heavily in WiMAX just as other wireless providers are lining up behind rival LTE - as one analyst says over on CNNMoney, "Sprint's stock has really become a highly leveraged bet on WiMax." An argument can be made that the latest 2,000 to 2,500 Sprinters may not be the last to be shown the door.

Maybe those unfortunate folks can find some solace in the fact that they have a head start in the job-hunting race. ®

The smart choice: opportunity from uncertainty

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