14 DAY TRIAL // Sprint Nextel Corp. announced that it planned to reduce internal and external labor costs by almost $1.2 billion during the first quarter of the year. According to the carrier, the plan would also include cutting 8,000 jobs within the company, and it expects the move to be almost complete by the end of March. The layoffs will be made at all levels of the company, while there will be variation on the affected geographies.
Late last year, the company started a voluntary separation plan, which included the elimination of around 850 positions from the total reduction announced. The carrier also stated that it expected a charge in excess of $300 million in the first quarter of the year for the separation, as well as related costs associated with the reduction.
“Labor reductions are always the most difficult action to take, but many companies are finding it necessary in this environment,” said Sprint CEO Dan Hesse. “We continue to improve the customer experience and these improvements are reflected in much higher levels of satisfaction in customer surveys and in independent performance tests. Our commitment to quality will not change.”
Sprint has managed to improve its customer services and is committed to leveraging them even more, which means that it will make fewer reductions in the customer-facing groups than in others. The company also offers high-performance devices like the Samsung Instinct, the BlackBerry Curve and the upcoming Palm Pre, which can enhance the user experience. Moreover, last month the carrier was named the winner of a nationwide 3G data test made by Gizmodo.
The carrier is struggling to lower costs and to remain financially secure through the economic turmoil, and the job cuts mark a last step taken towards this goal. Sprint also plans to suspend the 401(k) match for 2009, which comes as an extended suspension of annual salary increases through 2009. On Thursday, Feb. 19, the company will announce its fourth quarter 2008 financial results.