Sprint employees are starting to feel the pinch after years of struggles at the shrinking wireless carrier. Sprint CEO Marcelo Claure recently broke the bad news to employees in a memo obtained by The Wall Street Journal. Free water bottles and yogurts are being scrapped along with a broader snacks program that was implemented earlier this year. It apparently was going to cost $600,000 per year, and Sprint's now trying to make every dollar count.
Worse than the snacks are a freeze on raises, reduced severance pay, and increasing out-of-pocket healthcare costs. The specter of layoffs also looms on the horizon.
Claure also tries to make clear that it's not just the rank and file who'll be feeling the squeeze — executives are now barred from hiring limos during business travel. They'll have to settle for taxis or Uber to get around.
"Take an owner’s mindset by treating every dollar as if it were your own."
The moves come after an earlier memo from the company's chief financial officer a month ago that called for an ambitious $2.5 billion in cost-cutting over a six-month period. The CFO wrote in it that, "the main thing to consider when requesting to spend money is to take an owner’s mindset by treating every dollar as if it were your own." The company spends over $25 billion in operating expenses each year.
Among other measures at the company, Sprint earlier announced that it would not partake in a high-profile wireless spectrum auction next year.
Free water bottles and yogurts for employees are going away
Sprint is targeting expenses, according to a statement provided to The Wall Street Journal, because its spending — as a ratio of its sales — is "several" points higher than its competitors T-Mobile, AT&T, and Verizon.
Hopes were high when Japanese telecom giant Softbank acquired Sprint in 2013, but it's been a slog since then despite efforts by the company's extremely successful CEO, Masayoshi Son. (Son is also the acting Chairman of Sprint, and he recently purchased a home in Kansas City to spend more time with his struggling Sprint endeavor.)
Earlier this year, Sprint fell behind T-Mobile to earn itself the dubious title of fourth-place US wireless carrier. That followed a failed acquisition attempt of the surging magenta-hued carrier, as well as a CEO swap late last year. Among other issues, Sprint finds itself saddled with a complex and outmoded wireless network. And since the company needs money to fix that network, it's now trying to save dollars wherever it can.