Sprint announces job cuts
Sprint this morning became the first of the major US telecommunications companies to announce layoffs brought about by recent economic conditions. The third largest provider said up to 8,000 jobs will be eliminated to reduce labor and operating expenses.
Additionally, the company said it has frozen 2009 salaries and 401(k) matching bonuses. The measures are expected to cost Sprint $300 million in the first quarter of 2009, but reduce operating costs by an annual $1.2 billion.
Sprint says these reductions are an effort to keep the company competitive and remain financially secure in this challenging economy. It had a cash balance of $4.1 billion in the third quarter of 2008, and expects that it will continue to generate free cash flow in the fourth quarter.
Of the 8,000 layoffs (which amount to approximately 14% of Sprint's total workforce), some 850 positions have already been surrendered under a voluntary separation plan the company first announced last year. That reduction concentrated on the sales and distribution channel, while the company's wider plans included a "reduced utilization of outsourced services and contractors."
Sprint has pushed its fourth quarter earnings call ahead in schedule to February 19, when the company is expected to go into greater depth as to where these cuts will take place, and if it will affect Sprint/Nextel, Embarq, or Xohm/Clear.