Sprint to Cut 3,000 Jobs, Shut Five Service Centers
Sprint PCS, in a cost-cutting move, said Friday that it would fire about 3,000 employees and close five of its 13 customer call service centers, including the Irvine operation, where 1,100 people will lose their jobs.
At the same time, Verizon Wireless, the industry’s largest company, said it is cutting 1,000 employees--about 2% of its work force--as the industry faces a slowdown in new subscribers after years of frenetic growth.
With about 45% of the U.S. population owning cellular telephones, adding new customers has become increasingly difficult. During the fourth quarter, both Verizon Wireless and Sprint PCS, the nation’s fourth largest, added fewer subscribers than Wall Street expected, analysts said.
Sprint, based in Kansas City, said it is slashing 9% of its wireless work force after a survey showed that 30% more of its customers are using its automated services rather than live operators, said spokeswoman Stephanie Walsh. It was unclear, though, how much of that might have come from 1.1 million new customers added in the fourth quarter.
The reduction in Orange County will leave only 600 Sprint wireless sales, marketing, personnel and finance employees in Irvine and elsewhere in the county, Walsh said.
Most of the company’s Irvine office will be vacated when the center closes June 28. Employees to be dismissed will receive severance, career counseling and opportunities at job fairs to get other employment, she said.
The Irvine operation, the only one in Southern California, is the largest of the call centers to be closed and the most expensive to operate, Walsh said. Others to be closed are in Atlanta; Lawrence, Kan.; and the Florida cities of Jacksonville and Tallahassee.
The cuts are expected to save Sprint $60 million a year.
Walsh said the five facilities are the smallest of the company’s call centers and need the most upgrading, an issue facing the whole industry.
Just as subscriber growth wanes, wireless carriers also must contend with the expense of upgrading their networks to provide advanced services, such as wireless high-speed Internet access, and to expand capacity so networks can handle more calls. Meantime, competition among the six national carriers has pushed down calling prices and increased marketing costs.
Unlike Sprint, Verizon Wireless is not laying off anyone dealing with customers, said spokesman Jim Gerace. Verizon Wireless, a joint venture of Verizon Communications and Britain’s Vodafone Group, will fire legal, finance, marketing and other administrative employees, he said. The layoffs will be spread out across the nation among the company’s 40,000 workers.
Sprint PCS shares fell 93 cents to close at $9.27, and Verizon Communications rose 7 cents to $45.61; both trade on the New York Stock Exchange.
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Reuters was used in compiling this report.
