Dan Hesse inherited a tough situation when he took over as CEO of Sprint Nextel. The company lost some 639,000 subscribers in the fourth quarter of 2007, and some investors have been lukewarm, to say the least, on the company's planned $5 Billion WiMAX rollout scheduled for this year.
Hesse's reportedly been showing a tough exterior since he stepped into his new role, and today he backed up his stance by issuing word that the company would eliminate some 4,000 jobs and close 8% of company-owned retail stores. Sprint's churn rate (the number of customers who cancel service) was 2.3% in Q4 of last year, which frankly is just too high for success. Part of that number is due to the company canceling service to customers who've been negligent about paying their bills - Sprint has had a recent history of giving out phone numbers to credit-risky customers.
Is this just the first in a series of hardline moves to come from Sprint Nextel? Rumors have been kicking around for awhile now regarding a forthcoming consolidation of company headquarters in Kansas, so we may see more belt-tightening news from the company before long. Looks like they'd better do *something*: Sprint Nextel shares were down almost 25% as of Friday morning when the layoff news broke.
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