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Summary:

As expected, Sprint (NYSE: S) Nextel is cutting 4,000 jobs and shutting 8 percent of its stores as the company wrestles with increasing cost…

As expected, Sprint (NYSE: S) Nextel is cutting 4,000 jobs and shutting 8 percent of its stores as the company wrestles with increasing costs and subscriber losses. The move is designed to save Sprint between $700-$800 million by the end of the year. Details include:

– Of its 1,400 Sprint-owned retail outlets, about 125 will be closed. More than 4,000 third-party distribution points will be eliminated. The company has roughly 20,000 total distribution points, including nearly 1,400 retail locations.

– The layoffs, which include management, should be completed sometime within the next six months. The job reductions come on top of last year’s layoff of 5,000 jobs from Sprint’s nearly 60,000 workforce.

The announcement comes after another batch of bad subscription numbers: Net gains of 500,000 subscribers through wholesale channels, growth of 256,000 Boost Unlimited users and net additions of 20,000 subscribers within affiliate channels were offset by net losses of 683,000 post-paid subscribers — the mainline customers who agree to annual contracts and pay monthly bills. It also lost 202,000 prepaid users during the quarter.

Sprint has pointed to economic factors, such as the housing crisis, for putting downward pressure on profits. But investors and Sprint’s board of directors had been complaining about poor operational performance for months; that led to the resignation of Gary Forsee as CEO in October and the hiring of Dan Hesse, the CEO of Sprint spin-off Embarq, as president and CEO. Apart from poor performance, Sprint has to cope with the heavy costs related to the build-out of its WiMAX network. The company

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  1. I can relate to Sprints problems with that of my own Sprint experience. I understand customer service. I'm the customer but where is the service? Sprint will start the new year with one less subscriber after I leave at the end of this month. (Do I hear even more footsteps behind me?)

    -JB
    Oakland,CA

  2. YES! My husband and I are right behind you JB. Unfortunately our contracts don't end until this fall – we are counting down the days, but are seriously considering paying the fine to get out of the contract and end this madness. I HATE SPRINT!

  3. This is not surpising at all. My sprint story? I had been with them for 7 years in 2004 when I changed jobs. At first, new job didn't provide a cell phone, so I sign up for a new two year deal and add a new line (one for me, one for the wife). A year later, work provides a cell and I no longer need the extra sprint line. I offer to resign a new two year deal on one of the lines, if they cancel the remaining year on the other line. Sprint refuses. I flat out told them, at the end of this year I'm leaving if you don't do this for me. They refuse. It's so counterintuitive it boggles the mind. 1 line for 2 years (and beyond, if I'm a happy customer) or 2 lines for one year and I'm gone forever…. they choose the later.

  4. Unfortunately, all the carriers work from the same "customer non-service" playbook. I am with Verizon and their customer service is just as bad. They won my business because their network is the best in my area. I just pray I don't need customer service, because when I do, its ALWAYS bad.

    My favorite is when they offer better prices on phones for new subscribers than for existing customers. So let me see…someone walking in off the street is more important to them than someone who has been a customer for 8 years. That's upside-down and backwards.

    Point is, the industry is a dinosaur and doesn't get it…enter Google to shake things up a little (albeit "a little")

  5. Sprint fraudulently sent me a bill for $400. instead of the usual $105 or so. Even though i called their "reps" 7 or 8 times, they never could explain the charge…..they just said that's what it is and you have to pay it. I asked if they would send me a statement explaining the charges, they said "no, we just told you what it is & we are sending this bill to the collection agency tomorrow. Oh, and by the way, you now owe us $675."!!!! Even though I had stopped service with them soon after the fraudulent charges, I somehow now had an extra "added bonus."

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