Sprint Nextel, Home Depot and Caterpillar Announce Layoffs

Sprint Nextel and Home Depot are among the latest companies to announce layoffs. CNET News reports that Spring Nextel Corp will cut 8,000 jobs through the first quarter. Although the company will spend nearly $300 million in severance pay, Sprint Nextel will save $1.2 billion in labor costs this year. Sprint will also suspend its 401k match plan and continue with its salary freeze.

Home Depot has also announced major cuts and layoffs. After poor performances during the economic downturn, Home Depot plans throw in the towel on its Expo design center and décor business. According to Marketwatch, Home Depot will close 34 Expo stores as well as several other design center stores. This will result in the loss of about 5,000 jobs.

Sprint Nextel and Home Depot are only two of many companies forced to make cuts. According to Bloomberg, Caterpillar Inc. will be cutting at least 61,000 jobs. ING, Microsoft, Yahoo, and Digg will also make upcoming layoffs. Drug companies Pfizer and Wyeth will merge, resulting in the elimination of 19,000 jobs.

Sprint Nextel, Home Depot, and Caterpillar Announce Layoffs: Poor Economy or Poor Service?

Due to poor sales performances, Sprint Nextel, Home Depot, and Caterpillar Inc. are being forced to cut jobs. One could blame the poor economy, or one could simply blame poor service.

While it is natural for consumers to cut back on spending during a recession, some of the responsibility lies with the companies. If customers are satisfied with the service, then they will naturally provide them with more business.

It's ironic that the consumers who were lamenting the state of GM and Chrysler were off buying German and Japanese cars instead. At least Sprint, Home Depot, and Caterpillar Inc. are not asking for bailouts.

From 2001-2003, I had a two-year contract with Sprint. I was appalled by the rude customer service people, clerical errors (that resulted in my being charged $70 which they refused to refund), poor reception, and frequently dropped calls. If Sprint Nextel service is anything like it was then, then I can understand why customers prefer AT&T and T-Mobile.

As for Home Depot, I do not have first-hand experience. However, Marketwatch reader comments suggested that the Home Depot Expo Design Center is responsible for its currently poor performance. Herb46 wrote, "It seems everything in Home Depot is way overpriced (compare to our local Menards), every time I need something, I can never get a sales associate, however, when I don't need something and am just browsing, they are on me like flies on a rib roast." GloomBoom.com wrote, "Design Expo was a loser. Mainly high-end stuff that had no mass appeal."

Many jobs are at stake. Poor economy or not, it seems that companies such as Sprint Nextel, Home Depot, and Caterpillar Inc. need to go back to the basics, figuring out what customers want, how much they're willing to pay, how to meet their needs, and how to retain their business.