Virgin Mobile USA cut nearly two-thirds of its staff this spring and will let go of most of the remaining staff this summer, sources familiar with the matter told the Kansas City Business Journal.
Virgin Mobile cut roughly one third of its total staff in March and transferred another third of its staff to Boost Mobile, Sprint’s other prepaid brand. The majority of the affected positions at that time consisted of marketing positions, which accounted for a large portion of Virgin Mobile’s business.
Most of the remaining employees — roughly 20 — were informed about two weeks ago that their positions would be cut, sources said. The affected positions included developers and customer care.
These reports match movement from several former Virgin Mobile staff members on LinkedIn, many of whom reported departing the company in December or this spring. Of 13 former Virgin Mobile employees that recently left the company, five currently work for Boost and the remainder work for other companies. Most of them held marketing, digital and customer experience positions.
Sprint did not confirm how many employees were cut, but a company spokeswoman wrote in an emailed statement that the company “is continually looking at areas of the business to ensure they are operating as efficiently as possible.”
“Virgin Mobile USA is an important part of Sprint’s prepaid business. Uniting the brand back under the Sprint Prepaid umbrella will create a more efficient environment, positioning the brand for continued success,” she added.
The cuts came just a year after Virgin Mobile announced its relaunch. The company moved into One Kansas City Place in January 2017, with the potential to receive up to $1.87 million through the Missouri Works program if it created 84 jobs in five years. As of October, the company had roughly 70 employees, and had finished renovating its new headquarters office by August 2017.
According to Sprint’s most recent annual report, the relaunch didn’t work.
In fiscal year 2017, Sprint (NYSE: S) added 363,000 prepaid subscribers, but those additions “were primarily due to growth in subscribers in the Boost Mobile prepaid brand, partially offset by subscriber losses in the Virgin Mobile prepaid brand due to continued competitive pressures in the market.”
A little over a year ago, Virgin Mobile announced its relaunch, after it had faded into obscurity. That plan relied heavily on Apple Inc., by launching Virgin as an iPhone-exclusive brand that ultimately would require customers to pay for their smartphones upfront instead of providing a subsidized service. The concern, according to analysts, was that by being an iPhone-only carrier, Virgin customers would have fewer low-cost options.
At the time of the launch, Wave7 Research Founder Jeffrey Moore wrote in an email that one major problem with the launch is that phone prices started at $279, while “prepaid customers are generally focused on devices of less than $100.”
Although Virgin Mobile has begun offering used devices at lower price points, it generally remains pricier than Boost Mobile.
Unlike Boost, Virgin Mobile didn’t build any physical storefronts, but distributed its products online, through Best Buy, Walmart, Target and Apple stores. However, Virgin Mobile couldn’t rely too heavily on the latter, as most Apple store employees won’t recommend one carrier over another.
Virgin Mobile was pulled from Target stores in early June, according to Wave7.
It’s unclear what happens to the Virgin Brand at the point. Moore said the brand still had a presence at most Walmart stores and some Best Buy locations. It also has been updated to offer the newest set of iPhones. But in the long term, it’s possible that Virgin could be wrapped into Boost or another company if Sprint merges with T-Mobile US Inc. (Nasdaq: TMUS).
Originally published in the Kansas City Business Journal on July 10, 2018