The popular wireless carrier in the United States, Sprint, is getting ready to cut the costs in the next six months as the company is struggling in the market. Recently, Sprint was pushed to fourth place behind the T-Mobile in the market position. Marcelo Claure, the Sprint Chief Executive Officer, said that the company is on the verge of reducing spending significantly. The CEO, however, did not reveal the dollars or how many employees will fall prey to the drastic cost reduction.
According to Wall Street Journal, Sprint may cut about $2.5 billion in expenses over the next 6 months. This will also include layoffs. The Chief Financial Officer of Sprint, Tarek Robbiati, in a memo said that the cost cuts will result in employment cuts without doubt and has asked the employees to watch the expenditure.
Robbiati urged the employees to have the mindset of the company owner when spending money and to treat each dollar as their own money. Sprint has announced that they are in the early stages of cost cutting process and hence it is not the time to reveal the details regarding the process.
According to Dave Tovar, the Sprint spokesperson, cost reduction is a difficult process and the company will not make any decisions lightly. The decisions made by the company will be first put to the employees and any employee impacted by the decision will be treated with dignity and respect. The company believes that the steps taken by the business are necessary to ensure that Sprint remains a viable, sustainable and successful business in the future also.
According to analysts of telecom services, what Sprint needs is not just slashing the costs, but superior market differentiation.
CEO Claure is trying different measures to boost the standing of the company. In April, Sprint announced a scheme in which the technicians from the company would make calls to the houses to encourage people to purchase their phones and set them up. Recently, the company also announced attractive iPhone prices to woo the customers. The plan included iPhone price as little as $1.
The company has made it clear that they have no plans to participate in the spectrum auction next year.
The main challenge for Sprint is from T- Mobile, which has been using perfect advertising and promotion strategies to improve their position in the U.S market. Though Sprint has competitive pricing it needs better network and effective marketing efforts to remain in the competition.