Sprint Cuts 4K Jobs and 8% of Stores

By Editor Wireless and Mobile News on January 18, 2008 12:11 PM

Sprint announced initial plans to streamline its business with reductions across the company including approximately 4,000 internal positions and reduced use of outsourced services. The company also expects to eliminate more than 4,000 third-party distribution points and to close approximately 125, or 8 percent, of its company-owned retail locations.

Sprint Nextel currently expects these actions to reduce its internal and external labor costs by an annualized rate of $700-$800 million by the end of 2008.

For the fourth quarter Sprint Nextel reported a net gain of 500,000 subscribers through wholesale channels, growth of 256,000 Boost Unlimited users and net additions of 20,000 subscribers within affiliate channels. These gains were offset by net losses of 683,000 post-paid subscribers and 202,000 traditional pre-paid users.

The employee headcount reductions are expected to be completed in the first half of the year and will include management and non-management positions throughout the company. The company will offer a voluntary separation plan for its employees, and displaced employees will receive separation pay and outplacement and other services. The company expects to record a first-quarter charge for severance costs associated with the workforce reduction.