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.