Why Sprint Nextel Is Firing 8,000 Employees (S)

No. 3 U.S. wireless carrier Sprint Nextel (S) is cutting 8,000 positions to save about $1.2 billion in annual labour costs.

No surprise. Since Sprint’s $35 billion acquisition of Nextel in 2005, the company has sputtered, while rivals like AT&T (T) and Verizon (VZ) have grown tremendously.

Below: Sprint’s biggest problem, in chart form. While rivals AT&T and Verizon both grew subscriber bases more than 40% from Q3 2005 to Q3 2008, Sprint Nextel’s subscriber base has only grown 11%. In recent quarters, the company has reported year-over-year customer base shrinkage.

So cutting costs is an obvious move. But the company still needs to do something — anything — to get more consumers interested in buying wireless service from them.

What will help? Palm’s (PALM) new Pre smartphone, coming in the next few months, is a Sprint exclusive. And the company has finally started to try some aggressive pricing, such as a new $50 per month unlimited calling/texting/Internet plan via its Boost subsidiary.

See Also:
Verizon Wireless Is Q4’s Big Winner, Sprint The Big Loser
Sprint Goes Cheap: $50 Unlimited Boost Mobile Plan
How Sprint Needs To Sell The Palm Pre: Soon, Cheap

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