Sprint Nextel, beset by rising financial problems and a loss of subscribers, said it would cut 8,000 jobs in the first quarter of 2009 as it looks to save around $1.2 billion annually, and attempts to turn around its business and stop the exodus of subscribers to other operators.
The wireless carrier, plagued by legal and financial trouble, announced that the cuts, which amount to 14 percent of its workforce, would be completed by March 31. The company said about 850 of the cuts are voluntary and that it expected to be charged $300 million for severance and other costs. It was not immediately known where the job cuts would come from, but Sprint has indicated in the past that it plans to close up to as many as 20 call centers in 2009. Sprint said the cuts would affect all levels of the company and that the geographic locations of the cuts would vary.
The company also said that Kathy Walker, Sprint's chief networking officer, would be leaving at the end of the first quarter, according to a report in The Wall Street Journal.
The carrier, the third largest in the United States, also said it would suspend its matching 401(k) program for the year as well as its tuition reimbursement program and would extend its freeze on salary increases.
"Labor reductions are always the most difficult action to take, but many companies are finding it necessary in this environment," Sprint CEO Dan Hesse said in a statement. "We continue to improve the customer experience and these improvements are reflected in much higher levels of satisfaction in customer surveys and in independent performance tests. Our commitment to quality will not change."
The cuts had been expected for some time, dating back to when Sprint announced it had lost 1.3 million subscribers in the third quarter. Hesse had previously refused to make any announcement about job cuts until Sprint reported its fourth quarter earnings and subscriber numbers. Sprint is expected to do so in February.
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- see this article
-see this Wall Street Journal article (sub. req.)
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