Mobile services

Sprint, Verizon Face Reorganization, Job Cuts

Amid all the new offers and price gouging, some US carriers are also cutting jobs and reorganizing as the wireless landscape becomes ever-more competitive.

Masayoshi Son, the CEO of Sprint Corp. (NYSE: S)'s owner SoftBank Corp. , said at a presentation in Japan recently that the Overland Park, Kan.-based carrier's latest reorganization will involve "thousands" of job cuts. Son also recently bought a house in Overland Park, an indication that he'll be spending more time at the company's headquarters, according to the Wall Street Journal.

More job cuts at Sprint have been on the cards after the operator announced plans to shave $2 billion off its costs by the end of fiscal 2016. It is not clear if Sprint CEO's Marcello Claure's reimbursement package -- nearly $22 million in fiscal 2014 -- will go under the knife as part of the cuts. (See Should CEO Pay Be Part of Sprint's $2B Shave?)

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The largest mobile operator in the US, Verizon Communications Inc. (NYSE: VZ), meanwhile, is also facing a reorganization of its wireless operations. Bloomberg reports that the company's 20 regional offices will be amalgamated into six and that and an unknown number of jobs will be cut.

Why this matters
With the traditional source of operator revenues -- voice -- drying up, the big four carriers are all competing for customers with data offers and smartphone deals in a saturated market. All of them have to try to lure customers from rival networks or build alternative sources of revenue.

The fight for third place is particularly evident between T-Mobile US Inc. and Sprint. T-Mobile has just started to offer free streaming for 24 video services that don't count against subscribers' data buckets. Sprint, meanwhile, unveiled an offer to cut all of its major rivals' bills in half for two years if customers defect to its network.

Clearly, however, the intense competitive pressure is being felt by the bigger players as well.

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— Dan Jones, Mobile Editor, Light Reading

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kq4ym 12/6/2015 | 4:40:13 PM
Re: Son House (get it?) Those $22 million executive pay packages surely can't be helping the bottom line. Although that's a very small part of the $2 billion in planned cuts, one would think there should be some rationality in just whose pay or job gets cut in a big organization.
DanJones 11/24/2015 | 3:08:03 PM
Re: Son House (get it?) It seems like AT&T is really trying to push the IoT/Connected Cars angle.
DanJones 11/23/2015 | 5:42:57 PM
Re: Son House (get it?) Agreed!
danielcawrey 11/23/2015 | 12:45:45 AM
Re: Son House (get it?) Voice has become a dinosaur. These big wireless companies are going to have to figure out how to profit from the next generation of wireless, which is data and devices. 

How will these companies fare? The have to become more involved in more than just a data provider. Content may be part of that, which is what Verizon is doing. But it make take even more.
steve q 11/21/2015 | 4:34:36 PM
Re: Son House (get it?) So I guess sprint will have no problem getting into verizon way. Verizon need to find a team that look at what the customer are likely to move too, and fios is sounds like the answer.
mendyk 11/21/2015 | 8:50:58 AM
Re: Son House (get it?) steve q -- This is why, from the outside, Verizon's "strategy" is puzzling. VZ has been adamant that it will not expand FiOS beyond its current service areas. Now, the "wireless business" has pretty much reached the upper limits of market share, and it looks like that sector is in for a pretty long period of margin pressure. Add to this the unconfirmed rumor that VZ may be looking to shed its enterprise unit, and you're left wondering what the plan really is.
steve q 11/20/2015 | 10:54:39 PM
Re: Son House (get it?) This may be the turning point for Verizon if they can not pull out of this new world of data is power. They may have to dump plan for the M90 and move back to where the money machine is in Fios where there is only one player to that game and the cost is low, The Fios in the bigger city like Boston,NY, will help them pull the weight needed to push out the new product for there wireless business. But only if they move fast Comcast is doing streaming with the use of the cloud dvr base and they have plan to use wifi to help push out hotspot so customer can use there cellphone wifi.
DanJones 11/20/2015 | 7:05:24 PM
Re: Son House (get it?) If they do really well with all this new strategy I can do a "House of The Rising Son" head one day!
mendyk 11/20/2015 | 4:16:12 PM
Re: Son House (get it?) As always ...
DanJones 11/20/2015 | 4:06:41 PM
Re: Son House (get it?) Way ahead of ya!



Hesse Out, Claure In: Sprint Is Son's House Now!

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