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Sprint to Lay Off Thousands of Customer Service Reps

By Richard Adhikari
Jan 28, 2016 12:32 PM PT

Sprint plans to lay off about 2,500 employees, including five vice presidents, according to news reports this week.

Sprint to Lay Off Thousands of Customer Service Reps

About 2,000 of the cuts are in customer service.

The company reportedly will close or reduce operations at customer care centers at its Overland Park headquarters in Kansas, and in Colorado, New Mexico, Tennessee, Texas and Virginia.

Customers can handle routine inquiries such as checking bill balances, making payments, and checking on device upgrade status and phone lease status online or through the Sprint Zone app, the company said.

Sprint also will rely on customer care sites run by vendors.

Sprint's Explanation

The company is in the middle of a multiyear turnaround strategy, radically transforming how it does business, and this requires changes in its cost structure and reallocation of resources, according to a statement provided to CRM Buyer by Sprint spokesperson Roni Singleton.

"We are in the process of significantly taking costs out of the business so the transformation of the company will be sustainable for the long term," the statement said. "Unfortunately, as we've said over the past several months, the effort to reduce our costs would impact all areas of our business, including jobs."

Meanwhile, retail customer service "is moving toward more of a self-serve and digital customer model," the statement said. "In the future, we anticipate that more of our customers will use this model to solve their basic needs, driving fewer calls to our customer care facilities."

Switching to Self-Service

Consumers are redefining the future of customer service, a study commissioned by BT and Avaya found.

Customers are happy to serve themselves through websites and mobile apps, but they have high expectations for quality service once they decide to seek third-party support, the study of 5,500 respondents from 10 countries, including the United States, found. A full 79 percent of respondents expect to get a response to a comment on social media within 15 minutes.

Further, 90 percent of respondents said they'll buy more from organizations that are easy to deal with.

One in five respondents believes Twitter and/or Facebook are the best ways to reach customer service, and nearly 50 percent said they'd like to see the agent they're speaking with -- through video chats -- to better resolve complex service issues.

Pushing customers too far down the route of self-service could rebound on companies, the study found.

Sprint's Record

Sprint, which ranks fourth of the four major wireless carriers in the United States, fares badly for both its traditional monthly postpaid and its prepaid services, a Consumer Reports survey released this month found.

The company also has been hemorrhaging customers and losing money over the years.

For its third quarter, Sprint had the highest postpaid phone net additions in three years, and Q3 postpaid churn reached a record low, the company reported Tuesday. Sprint also added postpaid customers the second consecutive quarter.

The Need for Change

"The industry is changing and Sprint is changing," observed technology industry analyst Jeff Kagan.

Sprint is "going through an enormous transformation at a fundamental level that it never did before," he told CRM Buyer. "Two years ago it was acquired by SoftBank, then it got a new CEO, and over the course of the past year it got several new senior executives and introduced various ideas such as the half off program, which seemed to work. They have new LTE and a new focus to provide more high-speed data. That's an exceptional transformation."

The company's transformation will continue for a couple more years, Kagan said, and "will involve some major steps and some pain in the form of cuts."

As for the customer care layoffs, "Sprint has probably thought this through carefully, and I don't think it'll do anything to lose customers," he added.

The market seems to agree. Sprint shares closed Tuesday at US$2.99, up 47 cents, then fell 4 cents in after-hours trading to $2.95, still well above Monday's closing price of $2.52.

Richard Adhikari has written about high-tech for leading industry publications since the 1990s and wonders where it's all leading to. Will implanted RFID chips in humans be the Mark of the Beast? Will nanotech solve our coming food crisis? Does Sturgeon's Law still hold true? You can connect with Richard on Google+.

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