Sprint May Close Call Centers To Save Costs

Because not enough employees have stepped up to take buyout packages, the company will also consider cutting positions starting in January.

William Gardner

December 9, 2008

1 Min Read
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Sprint Nextel may be closing as many as 20 call centers starting as early as next year in an effort to save costs Sprint executives said this week.

Chief service officer Bob Johnson told Bloomberg News that the closures could happen over the 2009-2010 calendar years as fewer questions about billing and service improvements come in. No savings amount was mentioned. Additionally, top brass indicated this week that they will consider cutting positions in January, the traditional favored month of job cuts at Sprint.

"Everything's on the table," CFO Robert Brust told The Washington Post, indicating that not enough employees have stepped up to take buyout packages. Last January, Sprint removed 4,000 employees from its payroll and closed more than 100 retail stores.

In recent months, the third largest U.S. cell phone service provider -- behind AT&T and Verizon Wireless -- has continued to hemorrhage subscribers even as it has improved its previously vilified customer service. Also on the plus side, Sprint launched its first mobile WiMax operation in Baltimore and saw its nationwide Clearwire operation launch.

The economic malaise is taking its toll on Sprint, too, and investment banking analysts were becoming increasingly negative on Clearwire, of which Sprint owns 51%. Barron's reports said that Morgan Stanley and J.P. Morgan analysts were negative on Clearwire stock. "We believe [Clearwire's] build plan appears likely to be slowed down reflecting in part the tough financing markets," wrote the J.P. Morgan analyst, according to Barron's.

Clearwire has an ambitious plan to upgrade and rollout mobile WiMax across the United States.

Sprint is in a somewhat paradoxical situation, because Clearwire's WiMax deployment is likely to compete with Sprint's 3G CDMA network, which also is nationwide. The two networks could exist side by side.

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