Sprint plans to cut another 2,100 jobs
KANSAS CITY, Mo. (AP) – Telecommunications company Sprint Corp. plans to eliminate another 2,100 jobs, or about 2.8 percent of its work force, during the next year as it restructures operations, cuts costs and tries to return to profitability. The nation’s third largest long-distance provider and fourth-largest wireless provider said Wednesday it will combine network, information technology and billing operations for several of its divisions as a way to save up to $145 million a year.
The layoffs are the latest in a series Sprint has made to try to stop losses. The telecommunications industry has been depressed for several years.
Sprint has laid off more than 15,000 employees since October 2001, and expects to have a work force of 72,00 after the latest cuts.
“The consolidations we are announcing today are a necessary step if we are to capitalize on our strength, which is the ability to offer a complete portfolio of wireline and wireless voice, data and Internet services under a single brand at a competitive price,” said William T. Esrey, Sprint’s chairman and chief executive.
The company said the reorganization’s goal is to create one division to handle all local, long-distance, Internet and wireless network needs for its customers.
Sprint now has separate divisions for local telephone, wireless and other services.
About 1,000 of the new job cuts reflect consolidation: 600 will be in network services, 300 in information technology and 150 in billing and accounts receivable.
The other 1,100 cuts reflect an effort to cut costs: 450 will be in local telephone operations; 300 in global markets and 200 from corporate center staff.
About half of the layoffs will be in Kansas City and the rest will be spread throughout the country, all over the course of the next year, said Bill White, a Sprint spokesman.
Jeff Kagan, an independent analyst based in Atlanta, called the move a “major shift in corporate strategy” that will help Sprint save money. But he said it will also “create some chaos” that hopefully won’t affect customers too much.
“There’s always a red flag when something like this happens that the customer could fall through the cracks,” Kagan said.
During the third quarter ended Sept. 30, Sprint lost $68 million as heavy losses in its wireless division eclipsed gains in its local and long-distance sector. Sprint PCS, the wireless division, lost $170 million during the quarter.
Sprint FON, which includes the company’s local and long-distance division, earned $102 million.
Last month, Sprint PCS laid off about 1,600 workers, or 6 percent of the division’s work force. PCS also released about 500 contractors.
Sprint FON shares were up 1 cent at $14.17 in midday trading Wednesday on the New York Stock Exchange while Sprint PCS shares lost 7 cents to $4.98.
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