Sprint Prepares for Launch of Palm Pre With Massive Layoffs
What a great choice of carrier partner Palm (PALM) has in Sprint Nextel (S), eh? A company with a longstanding reputation for lousy customer service, poor network coverage, high churn and Keystone Kops-style management disorganization. A company that lost 1.3 million customers in the third quarter. And now a company that plans to sack 8,000 employees, or 14.3 percent of its workforce, by the end of March–a month rumored to see the introduction of Palm’s new hail-Mary handset, the Pre.
“Labor reductions are always the most difficult action to take, but many companies are finding it necessary in this environment,” Sprint CEO Dan Hesse said in a statement announcing the layoffs. “We continue to improve the customer experience, and these improvements are reflected in much higher levels of satisfaction in customer surveys and in independent performance tests. Our commitment to quality will not change.”
Yeah, well, your commitment to quality might not change, but quality itself certainly will. A 14.3 percent reduction in workforce isn’t likely to improve Sprint’s customer experience, now is it?
“It’s a difficult industry in which to shrink your way to greatness,” said Stifel Nicolaus analyst Christopher King. “Investors would much rather see the company growing this business, hiring people.”
With the launch of the Pre approaching, Palm surely would as well.
[Image credit: MSN Money]