14 DAY TRIAL // Mobile phone carrier Sprint Nextel announced on Monday that it planned on operating a series of internal and external labor cost reductions. According to the company, the move includes the layoff of a number of approximately 2,000 - 2,500 employees in the fourth quarter of this year, something that should enable it to save around $350 million on an annual basis. The carrier also announced that the job cuts would differ by location, and that some of the employees would be sent home by December 31.
Positions all around the company will be impacted by the new cost reduction measures, and the previously announced cuts in the Wholesale organization are included in the new figures, as well as contractor and other outside labor reductions, Sprint announced. However, the new measures should not influence the user experience, the company stated, adding that it is still committed to the quality of services and products it offers to its users.
“Sprint has seen a notable reduction in calls per subscriber to customer care and increased customer satisfaction resulting from customer service improvements for seven sequential quarters. In this period, the company has been able to discontinue the use of 27 call centers as call volume has decreased in the wake of service improvements. Furthermore, the company’s networks continue to operate with current best-ever metrics and has resulted in Sprint being named by PC World Magazine as having the most reliable network,” the carrier notes.
Sprint has been struggling for quite some time now to become more competitive and to maintain its financial security in the changing economic climate, and the new labor reductions are the last action it takes in the area. The carrier announced that, at the end of this year’s third quarter, it had a balance of $5.9 billion in cash, cash equivalents, and short-term investments, and that it should also generate positive Free Cash Flow during the fourth quarter. Severance benefits and outplacement services will be provided for the impacted employees, the carrier announced. Severance and related costs associated with the reduction should total $60 million to $80 million in Q4, according to Sprint.