Sprint Disconnects 8,000 Employees
The Overland, Kan.-based telecommunications giant said the job cuts will be across the board in various locations. The total number includes approximately 850 positions eliminated under a voluntary separation plan that began in December, involving approximately 5,000 jobs. In addition, Sprint said it expects to recognize a charge in excess of $300 million in the first quarter of 2009.
Other cost-cutting measures include the company's suspension of a 401(k) match for 2009, a 2008 suspension of annual salary increases through 2009, and an end to its tuition reimbursement program for 2009.
"Labor reductions are always the most difficult action to take, but many companies are finding it necessary in this environment," said Sprint CEO Dan Hesse, in a statement.
Sprint is the third largest cell phone company in the U.S. following AT&T and Verizon Wireless, respectively.
The carrier has reported dismal quarterly results this year. For Sprint's first quarter, it reported a loss of $505 million in May, followed by a second-quarter loss of $344 million reported in August, and a third-quarter loss of $326 million reported in November.
Sprint has continued to see substantial losses in post-paid and prepaid customers, while AT&T and Verizon have gained millions of subscribers.
"Clearly, as the company has struggled operationally, it needs to align its cost structure with its current business model," Stanford Group analyst Michael Nelson told Reuters. "It's a step in the right direction, but it's certainly not going to turn around the company."
Despite its woes, Sprint made some major announcements in 2008. Most recently, in December, the company debuted a dual-mode 3G and 4G modem that operates on both Sprint's 3G and 4G networks. Sprint also released the much-hyped BlackBerry Curve 8350i smartphone in December.
Sprint said it is releasing its fourth-quarter 2008 financial results on Thursday, Feb. 19, a week earlier than it had planned.