[Please see the update at the end of this post.]
According to VentureBeat’s Matt Marshall, the US division of Virgin Mobile is considering the layoffs in the face of poor stock performance. Those affected would come mostly from the Northern California offices in Walnut Creek along with some marketing and sales people in New Jersey.
Virgin Mobile USA apparently only has around 450 total employees, so a 300-person cut would be pretty aggressive. Part of the reason for Virgin’s failure to perform admirably, according to Marshall, stems from the fact that it’s hard for a US-based MVNO to win enough subscribers away from the already-established wireless companies here.
It might work well with kids (this is my opinion now) as a first phone, but a lot of people have been with the same company for a while and either don’t know much about Virgin other than “it’s basically Sprint” or don’t see big enough savings to necessitate a switch. Look at what’s happened recently to Amp’d and Helio for more examples of how an MVNO can fail or falter despite its best efforts.
Still, all is not lost for Virgin Mobile USA’s employees. The talks of cuts are just that; talks. The company’s also “considering a number of options” like private equity so nothing’s quite set in stone yet, although Marshall points out that because of how the company is structured — it’s a joint venture with Sprint — it won’t be a cake walk.
[UPDATE 5:45 PM EST]
Just got this in an e-mail from Virgin Mobile’s VP of Corporate Communications.
“Recent information that has appeared about potential layoffs connected to outsourcing at Virgin Mobile USA contains a number of inaccuracies.
Headquartered in Warren, New Jersey, Virgin Mobile USA has approximately 450 employees. Speculation that ’300 layoffs’ might take place is incorrect.
Focused on continuing to expand, Virgin Mobile is always exploring ways in which we can be more productive and effective. We are reviewing our growth strategy for the next several years, and are therefore looking at a number of options with regard to our technology operations and partnerships including the possibility of reshaping or outsourcing the IT division, The mobile industry changes rapidly and anything that serves to enhance technological capabilities is a positive step toward future growth.
We have made no final determinations and therefore it’s premature to speculate as to any details or specifics.
Finally, with over five million customers and distribution in more than 140,000 retail outlets, comparisons to other MVNOs that served niche audiences is also inappropriate.”
My source for this article is VentureBeat’s Virgin Mobile may cut 300 jobs, as yet another MVNO reels, which makes references to the idea that Virgin Mobile “might” cut 300 jobs and compares it to other MVNO providers. I’ll be sure to reference any updates or changes to VentureBeat’s post within this one.