Sprint cuts 4000 jobs
The third biggest mobile phone service provider in the US is slashing 4000 jobs and closing about 8% of its stores.
Sprint Nextel has announced it is shut 125 stores, and eliminate 4000 kiosks within other retailers. It currently has about 20,000 total distribution points, including 1400 of its own retail stores.
Network and customer service problems have driven customers to rivals including AT&T and Verizon Wireless.
The company admitted that it lost 683,000 post-paid subscribers in the fourth quarter - these are customers who are on monthly contracts and pay monthly bills.
Sprint also lost 202,000 prepaid subscribers.
It saw a net gain of 500,000 subscribers through wholesale channels, growth of 256,000 Boost Unlimited users and net additions of 20,000 subscribers in its affiliate channels, reports Reuters.
Analysts were highly critical of Sprint's performance which resulted in an almost immediate shares slump.
Sprint shares closed down $2.87 to $8.70 after trading as low as $8.15 earlier in the session. This, says Reuters, is its steepest drop in a single trading day for nearly 30 years.
Some are also questioning the wisdom of cutting jobs at a time when the company needs to accelerate growth.
"They're trying to keep ahead of a business ... that seems to be springing new leaks faster than they can plug them", Sanford C. Bernstein analyst Craig Moffett told Reuters.
He also warned that Sprint's difficulties may soon be echoed across the US market. "The risk here is that the losses we're seeing at Sprint may be just the tip of the iceberg, and that we are heading into an industrywide deceleration."
Sprint has made the drastic job cuts to cut its labour costs by an annual rate of $700 million to $800 million by the end of 2008.
Sprint is due to release its Q4 results on 28 February.