Marcelo Claure, Sprint’s CEO, has done something that his predecessors were not able to do. And that was to shave off some of the spending that Sprint had. The company was hemorrhaging money and customers for years, before Claure took the reigns at Sprint. Claure was determined to lower the amount of money Sprint was spending, but do it in a smart way. The company eliminated a number of programs that weren’t helping, it also discounted the sponsorship with NASCAR and included layoffs. Through these, Claure has been able to save Sprint around $5 billion in just a little under three years. That’s pretty impressive in its own right, and has helped Sprint return to profitability. Not to mention the influx of customers have also helped.
However, Claure is not done yet. The CEO expects “to take out a couple of billion dollars of cost”. Which means that there will be more cuts on the way. Claure estimated, at a recent investor conference he appeared at, that Sprint would reduce their expenses by around $1.3 billion to $1.5 billion this year. That’s even with the company investing in densifying their network, and expanding their distribution. Sprint is planning to do some massive investing this year to help grow the company. Claure says that even after this year, there is likely still room for them to shave more off of its spending.
When Sprint changed CEO’s, going from Dan Hesse to Marcelo Claure in 2014, he inherited a bloated company. It was full of things that had been attempted – to bring back customers and bring in cash – but didn’t work. Sprint also has a huge pile of debt that will be coming due in the next few years. Making the cost cutting that Claure is doing, a pretty big deal. Claure immediately began cutting different things, like employee family discounts, and the NASCAR sponsorship. Which appear to not have had a negative affect on the company’s bottom line so far. Claure had also stated that they needed to lower prices, since its network wasn’t worth what it was charging. The company did that and was able to start actually gaining customers. Sprint still aren’t as profitable as it would like to be, but it is heading in that direction.