Cell phone manufacturers are being hit hard by the current recession and have started a wave of lay-offs that promises to continue into 2009 and possibly beyond. Sprint-Nextel, suffering from a huge fourth quarter loss, recently announced it will lay off 8,000 workers, or 13% of its total work force. Texas Instruments, a company that makes chips for cell phones is shedding 3,400 jobs, or 12% of its total workforce. Sales of the chips used in cell phones fell 2.8% worldwide in 2008, a result of economic uncertainty in the face of overall slower growth.

Sprint, however, has been struggling with severe image problems since well before the global economic downturn, most of them a result of poor customer service and lack of customer retention. At one point in 2008, Sprint became so desperate to stop hemorrhaging customers it started a special unit that intercepted negative posts on message boards and consumer forum by former customers, interrupting those posts with an instant message from a Sprint CSR offering to make the issue right. Apparently, that move was too little too late.