Sprint does what it needs to stem losses: layoffs all around

The financial results for Sprint Nextel this quarter were a mixed bag, with more bad in there than good. As GoMo reported at the time, unlimited mobile plans had seen wireless revenues go up for the company - but overall it posted a loss of almost half a billion dollars. And now we’re starting to see a definite reaction from Sprint.

What’s the plan?

The day after the Q3 losses were reported, releases came from Sprint about how it planned to attract customers next year - a concentration on Android devices, more investment in WiMAX, and it’s very own application store. But today we get the skinny on how the gap is really to be shored up: massive cost cuts across the board.

Sprint has announced that it will have to reduce internal and external labours costs by at $350 million each year - which includes axing between 2,000 and 2,500 employees within the company. That’s “internal”. Contractor and other outside labour will see huge cuts as well. The geographic disposition of the cuts hasn’t been decided yet, but Sprint lets us know in very PC terms that “many impacted positions will be eliminated by December 31, 2009″. Ouch. It’s tough getting fired over Christmas.

What we think?

Sprint has a reputation for being unreliable - and where it may have deserved that in the past, it certainly doesn’t seem to now. Metrics and analysis show that these days Sprint is the most reliable network in the US. Customer service calls have been greatly reduced. But it takes a long time to shake a bad name. The question is whether Sprint can do it before the recurring rumours about it selling up actually come true.

However, seeing as Sprint had almost $6 billion in cash sitting in its accounts at the end of Q3, it’s probably not in any immediate danger. Especially not when it’s being so liberal with the boot.