On his 85th day as the CEO of the company, Marcelo Claure of Sprint Corporation (NYSE:S) announced on Monday, 3rd November, 2014 that the company has taken a decision to lay off 2000 of its employees. Another crucial decision had been taken recently, meaning on Friday, 31st October, 2014. It pertained to appointing Junichi Miyakawa as the new chief operating officer following which he will be responsible for supervising as the entire network is subjected to being completely overhauled.
As a company, Sprint Corporation (NYSE:S) has been accruing losses since the past few quarters owing to majority of its subscribers moving over to the competition, the reason being glaring gaps in coverage. With losses having accumulated over a period of time, the worst scenario for the company occurred when its shares reported a loss of 19 cents as against 6 cents that had been predicted by analysts. Subsequent to this was the decision to lay off 2000 employees so as to bring down labor costs by a whopping $400 million on an annual basis.
CEO of Sprint Corporation (NYSE:S) Marcelo Claure justified his decision by saying that job cuts were something that he had warned his employees on the day he had taken over. To justify his actions further, he said –
“We have started a transformational journey. While the company continues to face headwinds, we have begun the first phase of our plan and are encouraged with the early results. Every day we are focused on improving our standing with consumers, improving our network and controlling our costs.”
80% of Sprint’s shares are owned by a Japanese concern SoftBank and instead of merging with its main competitor T-Mobile in August, the company opted for the pathway that called for a complete revamp. At present, it is vying for the third spot in the list of American carriers, the first two being Verizon and AT&T. Also latest on Sprint Corporation (NYSE:S)’s bulletin in a plan titled ‘iPhone for life’ which it hopes will help to bring back customers.
This article has been written by Vinita Basu.
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