Sprint Nextel Layoffs, Price Cuts Coming? (S)


After recent conversations with Sprint Nextel (S) CFO Bob Brust, Pali Research analyst Walter Piecyk thinks Sprint has two big moves ahead, published today in a research note (registration required):

  • Announcing a “significant workforce reduction” in January, which would result in a Q1 charge but could help it beat 2009 and 2010 EBITDA consensus.
  • Trying to juice subscriber growth, potentially via price cuts. “With customer care in good shape, more flexible covenants in place and a planned layoff in January, CEO Dan Hesse has the financial flexibility and the organizational structure to make whatever moves he wants in order to stimulate growth.”

Makes sense to us. We also hope Sprint’s tech staff is working as hard as possible to start selling some Google (GOOG) Android devices to compete better against Apple’s (AAPL) iPhone, Verizon’s (VZ) BlackBerry Storm from RIM (RIMM), and Google’s G1 at T-Mobile (DT).

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