Sprint Fired 452 Employees Last Weekend, Keeps Chasing Low-End Data Consumers

Telecom & Wireless

Published: October 22, 2014 4:32 pm

Last Updated: April 28, 2020 5:23 am

Source: courtesy of Sprint Corp.

In an effort to maintain its position as the low-cost leader in wireless data, Sprint Corp. (NYSE: S) Wednesday announced a 1-gigabyte shared data allowance for $20 in its Family Share Pack. The wireless carrier claims that its plan doubles the data offered by Verizon Communications Inc. (NYSE: VZ) and more than triples the data offered by AT&T Inc. (NYSE: T) at the same price point.

According to Sprint this is how it works:

Customers can build their own plan in three easy steps. First, choose the shared data allowance. For 1GB, it’s $20 per month for up to 10 lines. Second, add data access for phones with unlimited talk and text while on the Sprint Network. The data access charge for non-discounted phones is $25 per month per line for 1GB through 16GB. Third, add your tablet devices for $10 per month per line and mobile broadband devices for $20 per month per line. There is no early termination fee and no annual service contract with non-discounted phones.

Sprint’s new CEO, Marcelo Claure, said, “We’re offering customers a choice – whether they need a small amount of data or are a high-end data user.”

One outcome from offering customers all these choices is that Sprint is bleeding employees. Last Saturday the company fired 452 workers at its Kansas headquarters, just the first of more according to reports at The Kansas City Star. Sprint said in its filing with the Kansas Department of Commerce that it anticipates “additional reduction activity in the next few weeks.”

Sprint will take a $160 million charge in its fiscal second quarter to cover the severance payments. More charges are possible the company said for future, unspecified cuts. Sprint had already fired 477 employees at it headquarters earlier this year, and the weekend cut will bring total headquarters job losses to 929 of around 7,500 people before the first cuts were made.

As long as Sprint targets the low-end of the market, both AT&T and Verizon are happy to encourage it to do so by occasionally dropping their own prices, forcing Sprint to match the lower one again. This can’t go on forever — so it won’t. What’s not clear is which of the strategies will prevail.

Sprint’s shares closed down 2.88% on Wednesday, at $6.06 in a 52-week range of $5.36 to $11.47.

ALSO READ: The 20 Most Profitable Companies in the World

Smart Investors Are Quietly Loading Up on These “Dividend Legends” (Sponsored)

If you want your portfolio to pay you cash like clockwork, it’s time to stop blindly following conventional wisdom like relying on Dividend Aristocrats. There’s a better option, and we want to show you. We’re offering a brand-new report on 2 stocks we believe offer the rare combination of a high dividend yield and significant stock appreciation upside. If you’re tired of feeling one step behind in this market, this free report is a must-read for you.

Click here to download your FREE copy of “2 Dividend Legends to Hold Forever” and start improving your portfolio today.