Did The iPhone Just Kill 4,000 Jobs?

Jan 18th, 2008 | By | Category: Internet TV, iPhone

Sprint has announced that it will be cutting 4,000 jobs and closing 8 percent of its stores:

The company said it would cut 125 stores and eliminate more than 4,000 sales outlets within retailers.  Sprint expects the measures to trim labor costs by an annual rate of $700 million to $800 million by the end of 2008. It will record a first-quarter charge for severance costs.

Sprint has been losing ground to bigger rivals such as AT&T amid network and customer service problems that drove away high-value post-paid customers who pay monthly bills.

Sprint also reported net losses of 683,000 post-paid subscribers and 202,000 prepaid subscribers for the quarter. In total, Sprint’s subscriber base was 53.8 million at the end of 2007, including 40.8 million post-paid and 4.1 million prepaid customers.

When you read that Sprint lost nearly 700,000 subscribers to AT&T and other rivals in the last quarter, you have to wonder how much of this is a side effect of the iPhone introduction.

Go into any Apple store, and you’ll see a lot of people checking out and buying iPhones – people that a year ago might have been shopping at a Sprint store.

As buyers demand more capable multimedia phones, we’re going to see more audience for podcasts, video podcasts and other Internet media grow. We’re also going to see some painful disruption in the phone industry, though, as companies struggle to deliver cutting-edge devices and services that can compete with what Apple and AT&T offer.

Tags: , , ,

6 Responses to “Did The iPhone Just Kill 4,000 Jobs?”

  1. Erik says:

    Sprint has been dying for quite a while, the iPhone has little to do with it. Just look at their stock price and you’ll understand why they’re cutting jobs. The stock slide started way before there was an iPhone

  2. Ed Roberts says:

    I agree with Erik. Living in the same town as Sprint’s world headquarters, the cuts weren’t terribly unexpected, and can be traced well before the iPhone.

  3. Eric says:

    The key sentence in the article is: “Sprint has been losing ground to bigger rivals such as AT&T amid network and customer service problems that drove away high-value post-paid customers who pay monthly bills.”

    It’s really very elementary: You don’t keep customers if you have a bad reputation for service, especially when larger companies like AT&T and Verizon are able to undercut your price. Just because AT&T is mentioned when Verizon is not has nothing to do with the iPhone, and everything to do with the size of the company.

    This article is grasping at straws that aren’t there.

    Eric

  4. info says:

    Eric

    From CNEt:

    “Subscribers from Sprint and T-Mobile were also the most likely to say they would switch providers to get the iPhone. About 12.5 percent of T-Mobile customers and 8.1 percent of Sprint customers surveyed expressed a high interest in the iPhone.”

    http://www.news.com/Switching-carriers-for-the-iPhone/2100-1039_3-6193464.html

  5. Cal Evans says:

    Sprint is dying because their support is horrible. I just switched to T-Mobile this month after 10 years with Sprint. The main reason I switched, the last time I re-upped with Sprint (2 years ago) it took me 4 hours on the phone with “Customer Retention”. I just didn’t feel like going through all of that hassle. I’m sure in 2 years, T-Mobile won’t offer me the deals they are offering new subscribers either…but then maybe I’ll get me an iPhone. :)

    =C=

  6. [...] 18th 2008 4:29pm [-] From: podcastingnews.com [...]

Leave a Reply