Tuesday, January 27, 2009

Sprint Nextel is On Its Way Out

A series of companies went out of business in 2008, including several airlines, banks, and retailers. Just one month into 2009, Circuit City was added to that list. Now it looks like Sprint Nextel will be next.

Here are some snippets from a recent USA Today article:

Sprint Nextel has announced 8,000 job cuts and other cost-saving measures that CEO Dan Hesse told employees in an internal memo kept the company from having to cut 3,000 additional jobs.

Sprint's decision to cut 15% of its workforce is the latest in a series of moves aimed at turning around the ailing wireless carrier. Sprint has been losing customers by the thousands, and the bleeding continues. The cuts will save $1.2 billion annually, the company says.

Despite major improvements of Sprint's two cellphone networks, many consumers still regard Sprint's service as substandard.

Rumors of a Sprint acquisition have been swirling for months, in part because the shares are so cheap - hovering around $2.49.

As part of its cost cutting, Sprint will freeze salaries and suspend matching contributions for its 401(k) — actions that saved the company from 3,000 more job cuts. The pay freeze also applies to Hesse, says Sprint spokeswoman Leigh Horner.

Sprint lost more than 1 million subscribers in the third quarter and is expected to lose as many in the fourth quarter.

1 comment:

  1. I actually have stock in Sprint and I'm still holding out hope. I think if they can just get that Palm Pre out the door they will see some earnings and customers return. Sprint remains very affordable. They just need to work on that image which is all types of messed up.