Sprint Nextel Restructuring & Job Cuts: Is the Telecom Sector Immune Enough?

Corporate Restructuring Strategy

We blogged about how the telco sector had been riding out the tectonic waves from the recession in Europe, albeit, American giant Sprint Nextel still seems to be shuffling its cards to get the right plays out. Last month, they confirmed about an unspecified number of job cuts as part of the senior level reorganization, and it is in execution mode now.

Reorganization: No Major Cuts, Luckily

According to Sprint’s Scott Sloat, the overall enterprise shuffling was dubbed as, “In early January, we announced changes at the senior officer level to consolidate business and consumer sales, business and consumer marketing and wholesale and M2M.” For the job cuts status, “The latest job reductions are a further extension of this consolidation. Sprint’s workforce is approximately 40,000 employees, and we do not expect this to change significantly with this reorganization. Sprint continues to hire new employees into positions that support our corporate strategy.” Now, according to resources affiliated with the company’s internal dynamics, the number of positions affected likely isn’t more than 100, and the cuts will go into effect in March.

US Telecom Sector Still Defining Strategy

From a global telecom industry perspective, what needs to be analyzed is the level of struggle here. Everyone has had to find a rubber tire from the wreckage to stay afloat, but Sprint seems to have had the tougher end of the bargain. We blogged about Sprint’s multi-billion, make-or-break gamble on the iPhone 5, and this all fits in. The merger of its consumer and enterprise sales and marketing divisions is aimed at streamlining the carrier’s operations, as it works to finance its network upgrade and iPhone launch. Not to mention, four executives will be seeing the door through this.

“Because of the enormous investments we’re making this year in Network Vision and in the iPhone, we need to consistently be looking for ways to be more efficient,” Sprint CEO Dan Hesse wrote in announcing the changes in January. We’ll be twitching to see how this all pays off towards a Sprint revival.

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