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Old 12-09-2008, 06:35 PM   #1
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Sprint May Close Up to 20 Call Centers, Cutting Costs

http://www.bloomberg.com/apps/news?p...okHDk&refer=us

Sprint May Close Up to 20 Call Centers, Cutting Costs (Update2)

By Amy Thomson

Dec. 9 (Bloomberg) -- Sprint Nextel Corp., the U.S. wireless carrier ranked the worst in customer satisfaction for two years running, may close as many as 20 call centers in 2009 as Chief Executive Officer Dan Hesse seeks to fight off the recession.

Calls about bills and handsets probably will drop 20 percent in 2009, the same as this year, amid service improvements, Chief Service Officer Bob Johnson said in an interview yesterday. Sprint simplified billing and directed more people to online help sites, so fewer centers are needed, he said.

The moves would cut the number of call centers by half since 2007. Hesse, 55, made customer satisfaction a priority after taking the helm at Sprint, which has lost almost 3 million contract subscribers this year. Johnson identified problems by creating charts that indicate “pain points” for clients, while Hesse tied bonuses to customer retention.

“If they are ever going to be in a position to grow the company ever again, churn is going to have to be reduced,” said Christopher King, an analyst at Stifel Nicolaus & Co. in Baltimore.

Hesse is balancing customer gains with costs as the economic slump eats into consumer budgets, prompting them to seek cheaper service plans. He and other Sprint executives are convinced they have improved customer service enough with their fixes that they can get rid of call centers without affecting clients.

Sprint may continue to lose subscribers through late 2009 or early 2010, with defections shrinking throughout that period, Chief Financial Officer Bob Brust said today at a conference. The company seeks to maintain a cash balance of about $4 billion to weather the recession, he said. Sprint spokesman James Fisher confirmed Brust’s comments.

Share Performance

Sprint, based in Overland Park, Kansas, fell 19 cents, or 7 percent, to $2.54 at 4 p.m. in New York Stock Exchange composite trading. The shares have dropped 81 percent this year.

Sprint introduced packages of unlimited voice and data partly because clients complained about charges for going over their allotted monthly minutes, Johnson said. The carrier also created a team to double-check customer data after discovering that the No. 1 topic of questions is billing.

Before the changes, “our customers were calling us at an increasingly alarming rate -- about twice of our competitors’ average per subscriber,” said Johnson, whose employer trails AT&T Inc. and Verizon Wireless in size. Sprint came in last among the biggest carriers in the latest customer-satisfaction survey by J.D. Power & Associates.

Shedding Contractors

The company plans to terminate contractors, who account for most of its customer-service workers, before cutting company employees. About 70 percent of the call centers are operated by outside vendors such as International Business Machines Corp. and Convergys Corp. Johnson said he wants to reduce outside vendors to half of call centers.

Sprint is trying to hold on to clients as consumer spending disintegrates and the U.S. wireless market nears saturation, leaving fewer potential new subscribers. Unemployment is at its highest level in 15 years after U.S. companies shed half a million jobs last month. Larger rival AT&T Inc. decided last week to cut 12,000 positions in response to the slowdown.

Sprint is cutting jobs throughout its units to shore up profit margins after five quarters of declining sales. Sprint offered employees outside of customer service severance packages last month if they leave voluntarily by January. The carrier declined to specify targets for the program.

Pali International Ltd. analyst Walter Piecyk said yesterday Sprint may cut “thousands” of jobs in January if too few workers opt for voluntary severance. Sprint has said it isn’t considering those cuts yet.

To contact the reporter on this story: Amy Thomson in Overland Park, Kansas, at athomson6@bloomberg.net

Last Updated: December 9, 2008 16:24 EST
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Old 12-09-2008, 11:11 PM   #2
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Unless I missed it, any idea how many people would lose their jobs if 20 centers were closed?
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Old 12-09-2008, 11:17 PM   #3
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Probably quite a few... It's one of the things that really scares me... I work in a call center for a large auto manufacturer that may or may not have just asked the government for billions... It scares the crap out of me to think of what will happen to my job...
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Old 12-09-2008, 11:18 PM   #4
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Wow 20 call centers? And during the holidays too. I hope those people end up ok if it is turns out to be true.
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Old 12-09-2008, 11:38 PM   #5
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Welcome to America. i'm not exactly angered at sprint about this. if we weren't going througha recession or anything else for that matter, in our country, then I would be mad at sprint for doing this. However, it's justified. At least it's only 20. It could be worse, but Hesse is using his brain and some common sense about this as well, which is good. I'm not excited about what they are about to do, but at the same time, I'm mad about it. As it is something they must do.
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Old 12-09-2008, 11:51 PM   #6
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Many companies are cutting employees. In St. Louis we had the Big 3. Ford is gone and the other 2 are trying to hold on. Anhaueser Busch (InBev) is cutting. Hopefully this will stop and reverse soon. Many people are wondering if they will be next. I am out of contract now and am reluctant to sign a new one in that if I lose my job I can drop my cell service to cut expenses. I might drop my data plan to cut costs even if I don't lose my job.
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Old 12-10-2008, 12:01 AM   #7
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Originally Posted by Bkprbob View Post
Many companies are cutting employees. In St. Louis we had the Big 3. Ford is gone and the other 2 are trying to hold on. Anhaueser Busch (InBev) is cutting. Hopefully this will stop and reverse soon. Many people are wondering if they will be next. I am out of contract now and am reluctant to sign a new one in that if I lose my job I can drop my cell service to cut expenses. I might drop my data plan to cut costs even if I don't lose my job.
Verizon Wireless just closed a call center in St. Louis as well.
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Old 12-10-2008, 12:18 AM   #8
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The good news from what I saw was they plan to cut outsourced before cutting in house positions in customer service (call centers)

If they make the cuts in the overseas outsourced, even better! In a time of recession, why shift money out of the country when you get far less language barrier complaints domestically.
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Old 12-10-2008, 12:24 AM   #9
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Many companies are cutting employees. In St. Louis we had the Big 3. Ford is gone and the other 2 are trying to hold on. Anhaueser Busch (InBev) is cutting. Hopefully this will stop and reverse soon. Many people are wondering if they will be next. I am out of contract now and am reluctant to sign a new one in that if I lose my job I can drop my cell service to cut expenses. I might drop my data plan to cut costs even if I don't lose my job.
InBev cutting positions seemed like it would happen if their was a recession or not. Being a global producer, many times they simply want the brand name and to cut managerial positions as well as production positions if they can shift production to other facilities around the world.

I know locally that they were being forced to spin off the Labatt's brand as their budweiser plus Labatt's brand sales would be well over 50% of the total market share. The hope is that they will keep the headquarters here and find a company that will buy the rights to brew the Labatts products as a way to keep InBev from getting too great of the market and raising prices because of their dominance.

Hopefully as far as sprint goes they will work on getting the company to the right size and one of the steps will be to cut excessive white collar positions. That's a far bigger savings to a company than cutting their sales force, which sprint needs to turn the corner on churn.
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Old 12-10-2008, 09:28 AM   #10
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like dan said, at least they are going to be cutting outsourced call centers first, that should help with a lot of complaints and call backs they get to the remaining call centers due to the language barriers. smart thinking on sprints side, now i just hope their stocks start going back up(down again so far today)
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Old 12-10-2008, 09:35 AM   #11
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Wow 20 call centers? And during the holidays too. I hope those people end up ok if it is turns out to be true.
It's not happening before the holidays. It's happening sometime in 2009. That doesn't make it any better though. Lost jobs are still lost jobs. I know. I lost quite a few people here at my bank
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Old 12-10-2008, 06:56 PM   #12
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Wow that is too bad, sorry for those loosing their jobs, this is so scary. For everyone now.
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Old 12-11-2008, 12:10 AM   #13
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this is why they have been making a big push to do online chats even for us workers for doing plan changes instead of calling. improving customer experience my butt
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Old 12-11-2008, 12:21 AM   #14
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this is why they have been making a big push to do online chats even for us workers for doing plan changes instead of calling. improving customer experience my butt
maybe its a big push to not tie up phone lines when you can use a chat rep to get a problem solved? Since the chat reps are from the company that would be losing call centers, it seems that sprint is simply not needing as many CS phone reps and will be closing outsourced call centers.

Keep domestic open and kill off the ones that speak broken english and have to come up with an american name like "Sam" to sound like they are not in india, etc.
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