Sprint Lays off 8,000 Workers
Jan. 29, 2009 (Vol. 30, No. 3)
Sprint Nextel will eliminate 8,000 positions within the company in an effort to reduce annual costs by approximately $1.2 billion, the Overland Park, Kan.-based carrier announced Jan. 26.
Sprint says the layoffs, which will hit about 14% of total employees, will be largely completed by the end of March. CEO Dan Hesse assured customers that Sprint’s commitment to quality will not change.
Sprint has struggled financially since acquiring Nextel in 2005 [VR 11/20/08], and continues to lose subscribers and funds in the failing economy.
“If the economy recovered tomorrow I think Sprint would continue to suffer,” says telecom expert Jeff Kagan, an analyst in Marietta, Ga.
Sprint expects a first-quarter charge of more than $300 million for severance costs.
Additionally, the nation’s third-largest wireless carrier announced that it will suspend its 401(k) match plan, extend a freeze on salary increases and suspend its tuition reimbursement program in 2009.
“Labor reductions are always the most difficult action to take, but many companies are finding it necessary in this environment,” Hesse says in a news release. (