Sprint, Verizon Face Reorganization, Job Cuts

Dan Jones
News Analysis
Dan Jones, Mobile Editor
11/20/2015



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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