Sprint To Shed 125 Shops, 4,000 Jobs 

Washington Post
Saturday, January 19, 2008

Sprint Nextel, suffering from a steady erosion of customers, said yesterday it is cutting about 7 percent of its workforce and closing 125 retail stores. The company's stock fell sharply, losing a quarter of its value.

The nation's third-largest wireless carrier declined to say how many of the 4,000 job cuts would come from its Reston headquarters. The company has about 60,000 employees worldwide, and it hopes to reduce the workforce by the end of June by offering buyouts. Failing that, the company said it may resort to layoffs.

Sprint has been struggling since its 2005 merger with Nextel. It warned of enduring difficulties, citing "continued downward pressure on subscriber trends, revenues and profitability in 2008."The retrenchment is the first major change undertaken by chief executive Daniel Hesse since he replaced Gary D. Forsee, the architect of the merger, in December.

Industry analysts said Hesse will decide in coming months whether to continue with plans to roll out WiMAX, a long-distance, broadband, wireless network, and whether to move the company's headquarters back to Overland Park, Kan. Hesse also must find a strategy to stem the migration of subscribers to Verizon and AT&T, which are regarded as offering better service and a wider selection of modern handsets. Some analysts expressed astonishment at Sprint's announcement that it lost nearly 700,000 subscribers in the final three months of last year.

"For Verizon -- if they gained that many subscribers -- that's bad," said Michael Thelander, wireless analyst with Signals Ahead. "And here Sprint loses that many.

"In total, Sprint lost about 1 million subscribers from its brand-name service last year. Many of the losses involve customers of the company's push-to-talk services pioneered by Nextel. Overall, Sprint has 53.8 million subscribers.Sprint distributes its phones at 20,000 locations -- including 1,400 retail shops -- and said it intended to shutter more than 4,000 of the third-party outlets.

Sprint said it expected to save $700 million to $800 million a year from the staff reductions, which will include the elimination of numerous con