Sprint ( S) is swinging the ax as wireless subscribers flee in large numbers. The No. 3 mobile phone service is preparing to cut "thousands" of employees, according to a report in The Wall Street Journal that cites people familiar with the plan. The news comes just three days after TheStreet.com first reported that Sprint lost more than 500,000 wireless customers in the fourth quarter. A Sprint representative declined to comment. The Reston, Va., telco has confounded investors, who have watched the company spiral downward the past two years amid a robust wireless market. Sprint is planning to release earnings sometime next month, and the disappointing results will be an especially hard test of investor loyalty. New CEO Dan Hesse is likely to suspend any financial guidance or investor updates until April as he completes a sweeping strategic review, say analysts and Sprint watchers. After the merger with Nextel, Sprint relocated its headquarters to Virginia, effectively giving the company an executive office in the East and an operations center in Kansas. Some observers say it's only a matter of time before Hesse consolidates the offices. But one source close to the company says Sprint fears losing key top managers in Reston if the headquarters are relocated. Hesse must also make big decisions regarding Nextel's iDEN network, possibly migrating customers to CDMA or potentially selling the system to public safety agencies. Sprint has also put a hold on all new WiMAX developments, while Hesse evaluates the business opportunity in this so-called 4G network technology. Meanwhile, rivals AT&T ( T) and Verizon Wireless -- co-owned by Verizon ( VZ) and Vodafone ( VOD) -- had a strong fourth quarter. Analysts say AT&T added more than 2.4 million new users thanks to the popularity of Apple's ( AAPL) iPhone and a strong push in prepaid service. Verizon is expected to post a solid 1.9 million fourth-quarter subscriber gain. Sprint shares fell 4 cents to $12.32 in after-hours trading Monday.