Sprint Prepares for Launch of Palm Pre With Massive Layoffs
by John Paczkowski
Posted on January 26, 2009 at 7:30 AM PT
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]
Comments
Let’s hope its only exclusive on Sprint for 3 months and they can get it on VZW asap!
Posted by Miles long at January 26th, 2009 at 8:03 amAs a briefly employed outsourced sprint customer service rep, this is par for the course. They change the rules for their reps constantly, and then punish them for errors. The rules have changed 3 times in a day. If they would let their outsourced companies do their jobs well, this wouldn’t be needed.
On the plus side, at least Sprint wants it’s service to consistently suck no matter who you talk to. Consistence is something to commend at least.
Posted by Robert Elliott at January 26th, 2009 at 8:25 amIn an age where customers are begging to engage brands it’s unthinkable that most companies are both laying off people and that they “are sick and tired” of hearing about social media. Does Sprint think that they can increase their customer service amid layoffs? It just shows that their loyalties are to the balance sheet first and customers will continue to get the shaft of poor service
Posted by Richard Meyer at January 26th, 2009 at 9:03 amSean Doherty from Sprint here. Just wanted to add a couple points of clarification – While some internal support functions at Sprint will see significant cuts, our Sprint customer care organization will see very few. We do plan to reduce the use of some outside vendor call centers in 2009 — but that is because we are receiving fewer calls to care and those operators are not needed.
All last year we worked to fix the problems that caused people to call us: we have a Simply Everything billing plan that eliminates surprises in your bill; we have a Ready Now program in stores in which we set up your phone for you and teach you how to use it before you leave the store; we have a simplified online customer care system; we follow up with customers by phone shortly after they start service to confirm everything is ok. Calls to Customer Care are decreasing, and first call resolution metrics are improving steadily. Executive escalations were at an all-time low in the fourth quarter of 2008.
Other metrics are improving as well. We have received the highest ranking for the last two quarters from Pali Research in its outside test of customer care quality. We’ve also gotten kudos on our network improvements from J.D. Power and most recently we won Gizmodo’s 3G data test.
That’s not to say the loss of 8,000 employees will not impact the business. We’ll likely do less — fewer HR programs, less real estate management, maybe even less communication — but we’re not going to sacrifice the great improvements we’ve made in serving our customers.
Posted by Sean Doherty at January 26th, 2009 at 12:47 pmI live in an area of Los Angeles and my Sprint service in my apartment stinks! Even bought a Sanyo phone because of supposed good antennas. Have tolerated subsequent bad reception for a couple years and used the home phone when I lose a cell call. Now I want to get rid of the home phone and rely only on cell phones (my wife and I each have one). She’s on Verizon and has no troubles in our apartment. Went to the local Sprint store and asked each salesperson to borrow a phone, leave a credit card, drivers’ license, return in 10 minutes. Just wanted to make sure reception hadn’t improved with newer phones. Five employees all said no. Now this is their personal phone, I can understand the reluctance. But isn’t this a company that is hemorrhaging customers? I’m not interested in signing up for a new plan and if unsatisfied, returning the phone within 30 days.
Posted by Nick Toren at January 26th, 2009 at 3:09 pmAlternatively, how about some more towers in my urban area? I’m not in the boonies, or even the suburbs. I live in a city of around 100,000 people, no buildings taller than 3 stories within a 5 block radius. Am I asking too much of a company that is in trouble?