I’ve written more than a few times on this topic and here we go again…
If you recall, I’ve been somewhat suspect as to Sprint CEO Marcelo Claure‘s ability to turn this ship around. Do you recall my reasoning for his likely failure?
For starters, he’s battling a pre-existing culture at Sprint – everything else he’s been successful at he started from scratch.
However, at Sprint, the CULTURE has become the CUSTOMER.
This past week, Claure agreed with me and revealed in a Q&A session; “At Brightstar, it was my company. I basically had to tell people, you’re going to do these things this way, and because I said so. … Here, you have to … spend a lot more time explaining to people the ‘why’ behind your decisions.”
In other words, Claure has finally figured out what your well-coiffed scribe predicted the week he took over.
He went on to tell the Wall Street Journal that he had taken on “one of the most difficult turnarounds, probably, in the world” because he’s baffled that a company with “$35 billion in revenue cannot turn a profit.”
Marcelo, it’s the culture….blow it up and start over.
The shit’s about to get real out there on the campus.
This week has been peppered with near comical, yet painful intentional leaks to the press.
For example, he wrote that executives traveling for business were prohibited from “renting a limousine and a driver for an entire day” and have been given orders to take a taxi or use Uber.
Concurrent with that message, a Sprint contact sent me the job posting for a chauffeur / driver whose primary job would be to drive executives and out of town guests. The posting adds that nights, weekends and holidays were all possible work times.
Then, Claure added a little factoid that for the life of me I don’t know how Sprint’s PR team let escape his keyboard. He moved to eliminate free “healthy snacks” served in the new, cut down, low wall cubical executive offices. Why?
The cost for healthy snacks was running $600,000 per year.
I’m going to repeat that. The cost to provide free, healthy snacks for the executive offices was $600,000 a year. Assuming a 5 day work week, there are 260 working days in a year. That works out to be $2,307.00 a day in “snacks.” If you figure a support staff of 40 on the new executive floor, that’s $57.00 a day. For snacks.
And the hits keep on coming…
Another of Claure’s targets for cost cutting is for the campus to go paperless.
“I don’t want to tell you how much we spend on paper around here, but it is significant,” Claure said. “And requiring everybody, including all of the executives — even ME — to manage their own trash will be another reminder that the old ways of operating must change.”
What does “manage your own trash mean?
In a recent email to employees Claure said he plans on “eliminating trash cans.”
I had an instant vision of Marcelo leaving work each night, walking down the long sidewalk to the parking garage, carrying his Price Chopper plastic bag containing his self-managed trash for the day…
As we all now know, Sprint is embarking on another round of layoffs.
However the most painful news for these people is that severance benefits will shrink for those tapped to go after Jan. 30th. Sprint has always provided two weeks’ severance for each year of employment, but now that’s being cut to one week.
Also, a $1,000 “additional separation lump sum payment is no longer part of the plan,” said Sandy Price, senior vice president of human resources, in a recent communication to employees.
I’ve spoken to three senior people who are currently begging to be let go as soon as possible. “It’s pretty grim and moral is at an all-time low,” I was told just prior to this writing.
When will we see the worst of the bloodletting? Look for a major layoff on Black Friday, November 13th.
In the words of Donald Trump, I’m told it’s going to be huuuuuge!
My best friend works there and is relatively high up says the lay-offs will not be as bad as people think. Says the customer is an afterthought there and they waste the most money on renting other companies cell towers instead of investing in their own, but that’s supposed to change.
Excellent comment! And nail on the head with the customer being an after thought. From the time I left I told anyone who would listen that the culture had become the customer. I’ve used that phrase in five or ten pieces here.
I made the comment a year ago that if Claure failed it would be because he couldnt change the culture.
I made the comment he’s ONLY been successful, even though he’s been wildly successful, a billionaire at 40, where he’s started the gig from the ground up.
And now, look at his comment this week? It’s not like BrightStar. He can’t just say “you’re going to do it like this!”
He can’t understand how with that much revenue that can’t find one pen full of black ink!
I hate to be repetitively redundant, but here’s your sign;
CULTURE
I hope he’s right on the numbers. Our local economy and the families involved don’t need the disruption it causes.
In the 90’s, Sprint hired an HR consultant who told them to do these big layoffs around Thanksgiving and Christmas because the employee would normally be surrounded by family and make it easier.
Consultant = a person who borrows your watch to tell you what time it is…
Honestly the one time I bought a Sprint cell phone the service was horrible and their customer service was NON EXISTENT. I was only able to go back to the store and talk to the guy who sold me the cell phone and honest to god he said “Cell phones weren’t meant to work indoors”. I got stuck with a $174 bill and I didn’t even use the phone for one week.
I moved to Verizon and although it was the more expensive option I’VE NEVER HAD ONE SINGLE PROBLEM WITH VERIZON.
Furioso, I had one of the first “Sprint PCS” cell phones in town. Sprint laid me off one day, along with 1,400 other employees.
The week after my layoff, Miriam Pepper, of the Star, did a full length article on me entitled “Better off Laid off.” The intent was to give hope, direction and faith to those in a similar place in life. My phone rang off the hook for five days. Over half from women in tears asking if I’d talk to their husbands. Most had just been laid off, many from Sprint. That led me to start a job support and resume development “ministry” through my church which I led for a number of years.
I remain a Sprint customer today. I’m grateful for the years I had there. It led me to the contacts I made, things I learned, that allowed me to open my own consulting firm. I went on to make more money than I did at Sprint. I have nothing bad to say about them. So why the detail?
My phone and email has blown up since this piece hit, from friends I have who are still there! Never, ever, have I gotten such a negative response to a piece!
And what I don’t understand, all I’ve done here is take 90% of the comments from interviews Claure has done, press releases, employee Q&A session, then put his/their words under a spot light?
The most negative comments? (1) the lede and (2) the comment about $600K in healthy snacks!
For some reason, and maybe the tensions are at an all time high, this story, ahhh, resonated. You could hear a pin drop.
I got tired of getting overcharged by Verizon and AT&T years ago. They charge way too much so they can advertise around the clock and pay all those hundreds of executives they’ve got all around the country. I bought a Sprint phone and it’s worked just fine since then. Former CEO Hesse might not have had the funds to advertise or do the great discount plans that Sprint has now, but one thing he did do was get the focus back on customer service. When I call into a center or go into a store, I get good service.
Dan Hesse single handedly turned that around. You are correct. Great man, great leadership.
seemed like a genuinely nice guy, at least outwardly anyway.
He was that…and then some.
The problem with Sprint is the employees.
I beat that drum all the way out the door and to my private labeled parking spot for my last drive home! Years and years later, it still rings true.
and yet, i’m getting notifications of new job postings from Sprint. i suppose in facing an impending layoff myself i should at least open them and have a look. but it’s kind of like, “oh hell, why bother?”
(btw… our layoffs, in our little corner of big HWL, ultimately caused by similar reasons — lack of focus on the customer, product roll-outs not fully tested and glitchy, inability to fix those glitches in a timely manner, and too inwardly focused on margin and other metrics found only in the world of “management by spreadsheets.” oh… left one out… over-promise and under-deliver.)
Job postings are everywhere. Don’t know if they are filling them or not.
Somebody hit the nail on the head. The furor and passion to be one of the best places to work in the country, snacks, is lost in the first layoff notice. Sprint lead the world in the technology of Lightwave communication. Then, they allowed their competition to catch up and surpass them. AT&T once sold their T1 lines, a 20 year old measurement out of Kansas City, borrowed or rental lines. Sprint is why you want to talk to somebody, even if it is your barber, before you invest.
^^^^Speaking of nail on the head – nail on the head. Nicely stated. No need to ask, where have all the Cowboys gone?
Why do you refer to yourself as, “your well-coiffed scribe” in almost all your articles? Plenty of subject matter regarding your hair.
Snappie, because my hair is the butt of frequent jokes by readers, friends and our esteemed editor! It’s just become a joke, meant not in vanity or pride, but poking fun at myself. I’m pretty good at self deprecating humor. There’s certainly enough material to be had!
As tea leaves for reading go, Sprint (S -1.3%) shareholders have looked to worse teas: Chairman Masayoshi Son has bought a home in Kansas City, an indication that he’ll be spending more time at headquarters working on the struggling carrier’s turnaround.
Son lives in Japan, but has been meeting monthly with Sprint execs in California, where he also owns a house. A home in Kansas City gives him a place to stay during more frequent visits to HQ.
The new home is also close to CEO Marcelo Claure’s house in the Mission Hills neighborhood.
Despite a dip today, Sprint shares are up 38% over the past three months.
Changing the culture is all you have to do. Right after you clean the Augean stables.
Telecom and broadband are almost commodities at this point. And in the commodity markets you have to be the #1 or #2 supplier or have a great niche market to make it.
During lean times at ACC lots of trash/waste paper was taken home by employees, smuggled out as it were.
I imagine the work day is much like The Walking Dead. Good luck to those souls whose bootheels will soon be wandering.
I have a friend that lives less than 4 miles from Sprint world HQ, and after a gazillion dropped calls, he went AT&T, and has had zero problems.
Then again, I have heard complaints from customers of ALL cel phone companies, so who knows?
Expanding its ongoing turnaround efforts, Sprint (NYSE:S) aims to slash fiscal 2016 expenses by as much as $2.5B, through job cuts and a wide array of cost controls.
“We are leaving no stone unturned and looking at all areas,” company spokesman Dave Tovar said in an interview, but declined to predict how many employees would be laid off.
The estimated cost savings for Sprint would be equivalent to about 10% of its current annual operating costs of $26B
After a cavalcade of recent customer-focused initiatives, Sprint (NYSE:S) is expected to add postpaid phone subscribers for the first time since Q4 2010 when it reports fiscal Q2 earnings tomorrow morning.
And that should lead to a narrower loss even if revenue slips as expected. Consensus expectations are for Sprint to post revenues of $8.1B, down 4% from the prior year’s $8.49B, and an EPS of -$0.07 compared to 2014’s -$0.12.
Sprint shares are up 2.5% today, a rebound from a couple of market days where the stock declined 5.6%.Oppenheimer’s Tim Horan sees a “modest level of phone net adds (perhaps in the 200,000 range),” and while he expects it’s a long-term underperformer, “for this upcoming quarter, the positive phone net adds, lease accounting benefits and new financing could benefit the stock.
“Pacific Crest’s Michael Bowen sees postpaid phone net adds of 45,000: “We expect Sprint to provide additional color on the formation of its leasing company and on its network strategy. In addition, we expect to hear more concrete plans regarding Sprint’s recent cost-cutting initiatives.”
A plan to cut $2.5B in costs that CFO Tarek Robbiati laid out last month has begun to get under way with such new moves as slashing severance pay and cutting free water and yogurt at HQ.