Sprint Lays Off 2000 Workers

After losing 272000 contracts and $192 million in the most recent quarter Sprint released a statement on Monday saying that they intend to lay off 2000 workers. Since early 2014 share prices have fallen from $10.79 per share to $6.20, nearly a drop of 40%. Sprint’s share of the market is slowly dwindling due to competition from rival companies, AT&T, and T-Mobile. In fact, on Oct. 27th T-Mobile reported having the best third quarter results in their history, gaining 2.3 million costumers. As an effort to reverse the current situation Sprint hired a new CEO Marcelo Claure in August to lead the turnaround efforts. After price cuts, strategy changes, and layoffs, the big turnaround has yet to take effect.

Going forward Sprint needs to primarily deal with their massive loss of costumers and try to build long term subscriber growth. In the most recent consumer survey Sprint was ranked dead last in customer satisfaction for poor service, reception, and reliability. A few years ago Sprint started on the path to upgrade their network to allow for faster service, however the transitional period has been long and slow causing more and more consumers to switch carriers. Indeed, for Sprint to remain the United States’ third largest wireless carrier they need to continue to grow and strengthen their wireless network at an increased speed. More money and time needs to be invested into improving all operations of the company so that they can hold onto their current subscribers and in the long run develop a larger company as a whole.

Update

After Monday’s disappointing earning’s report share prices fell today 17% today to $5.16. This shows just how uncertain the investors’ confidence is in Claure’s ability to fix the current situation that Sprint is in. Many analysts were expecting to see improvements in earnings after the change in leadership, however those expectations clearly fell short. If the year end earnings report does not show an improvement from the current situation it could leave an uncertain future destined for the company.

 

Sources

http://newsroom.t-mobile.com/media-kits/t-mobile-us-reports-third-quarter-2014-results.htm

http://www.kansascity.com/news/business/article3554846.html

https://mysprint.sprint.com/mysprint/jsp/landingPage/contactus.jsp

 

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