As Sprint goes through yet another high-growth quarter projecting customer losses, Walter Piecyk at Pali Research is making some projections of his own.
Piecyk, never shy about forecasting on Sprint's future, wrote this morning that he expects "a significant workforce reduction in January" at the No. 3 wireless company.
The move, Piecyk said, is necessary for Sprint to "quickly adjust its bloated cost structure."
"Our views are in part based on recent conversations with Sprint CFO Bob Brust," Piecyk said.
Piecyk indicated that he believes cuts could be massive.
"In addition to a restructuring, we believe cost reductions in customer care and in other parts of the organization will accelerate in 2009 and could amount to billions not millions of annualized cost savings."
The analyst also said he believes CEO Dan Hesse will take "more drastic actions" to stimulate subscriber growth.
"...We do not believe that price cuts are off the table," Piecyk wrote. "With customer care in good shape, more flexible covenants in place and a planned layoff in January, (Hesse) has the financial flexibility and the organization structure to make whatever moves he wants in order to stimulate growth."
Piecyk said Hesse needs to find a replacement quickly for John Garcia, who resigned as head of CDMA operations.
"We believe the company needs to quickly find a replacement for former head of CDMA, John Garcia, to help (Hesse) fully develop a marketing strategy," Piecyk wrote. "For the moment, John Garcia’s departure places the reponsibilty to grow gross additions squarely on Hesse’s shoulders. That would appear to set him up to emerge as the hero or the latest scapegoat."

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