In an effort to boost their ability to compete with Verizon and AT&T, Sprint announced that they would be cutting an unspecified number of positions this month. The cuts come at a time when Sprint has struggled to compete with Verizon and AT&T.
Late in the summer Sprint dropped their bid to purchase rival carrier T-Mobile US, and also replaced longtime CEO Dan Hesse with Macelo Claure. Sprint is now owned by Softbank of Japan, who bought a 70% stake in Sprint in 2013.
High-ranking members of the company have been sharing the sentiment that cutting prices, or attracting new customers is going to be necessary if the company wants to continue functioning in the way they have been accustomed to. Right now, the company is struggling in a way that might be grim for some loyal Sprint customers.
According to Masayoshi Son, Sprint needs to compete aggressively with their larger competitors like AT&T and Verizon. Last year Nextel was shut down after continuing struggling results as a service, and it looks like Sprint could be heading down a similar path if they don’t change their methods drastically to draw attention to themselves.
This year alone, Sprint stock has dropped 42%. Customers have lost faith, investors have lost faith, and employees can’t feel much better – as the company works to eliminate managers and other levels of employees with this latest round of cuts. Even more concerning for customers would be the potential cut down, and eventual liquidation of their base.
As they continue cutting employees, one major knock has been continued declining active lines of service. The company has been steadily losing customers, and without refocusing their service, it could be a turning point. This is clearly an effort to shift some money around the company, and it will be interesting to see what the company plans to do with the money they will save cutting these jobs.
The company is keeping the specifics of the round of layoffs under a tight lid, but this is something that should have profound impact on the future of the company. Whether that means giving it a boost, with the influx of funds that can be used to draw new customers – or perhaps the beginning of the end for the United States third largest cellular carrier.