It looks like Sprint’s Voluntary Separation Probgram (VSP) we scooped last month didn’t quite have the impact the company had hoped for. Surprising that employees didn’t jump at the opportunity to leave their jobs as the unemployment rate in this country continues to skyrocket. The deadline for Sprint employees to express interest in the VSP was this past Wednesday and just six days later, Sprint CFO Bob Brust began speaking publicly of impending company-wide job cuts at the UBS annual media and communications conference. Not good.
The philosophy has to be that a company never went out of business because it took too many costs out. A company goes out of business because you didn’t take enough costs out. As you take costs out, you can always overshoot it. In fact, if we overshoot it, you know you did a good job because the pain is so loud, and you can always go back in and add something. We are going to be in the mode of overshooting, so the number will be a big number.
Brust went on to state that Sprint execs would be presenting a plan to the board sometime next month so we can expect layoffs to begin shortly thereafter. Not that is has been any mystery that Sprint’s vitals are declining at frighteningly rapid speeds, but we were surprised to see Burst as vocal as he was. He was even quoted at one point as saying, “We’ve had a lot of trouble with the brands since the [Sprint-Nextel] merger because of dropped calls and bad customer service. As we spend more money on recapturing subscribers, we can get the brand back where it belongs… You’ll see a more aggressive advertising campaign.” Admitting to network issues and bad customer service? How uncharacteristic of a carrier is that? Perhaps it’s a sign of the sheer desperation within the c-suite at Sprint. Whatever the case may be, more rough times are undoubtedly ahead for the carrier and its employees over the coming months and beyond.