Sprint to cut 2,500 jobs
Sprint Nextel Corp., the third- largest U.S. mobile-phone carrier, will cut as much as 6 percent of its workforce as the company loses subscribers to rivals.
Sprint will eliminate 2,000 to 2,500 jobs, saving at least $350 million annually, the Overland Park, Kansas-based company said in a statement yesterday. The companywide measure extends to contractors and many of the cuts will be completed by year- end, Sprint said.
The action supplements a round of 8,000 job cuts announced in January. Chief Executive Officer Dan Hesse is working to reverse the tide of customer defections, which totaled more than 2 million in the 12 months through September. AT&T Inc. and Verizon Wireless gained market share with new models of Apple Inc.’s iPhone and Research In Motion Ltd.’s BlackBerry.
“They have a lot less subscribers than they had a year ago,” said Christopher King, an analyst at Stifel Nicolaus & Co. in Baltimore. He has a “hold” rating on the shares and doesn’t own any. “The business is shrinking. You don’t need as many people to maintain customer contact.”
Sprint jumped 58 cents, or 20 percent, to $3.43 yesterday on the New York Stock Exchange. The shares have gained 87 percent this year.
The cuts will cost $60 million to $80 million after Sprint pays for severance packages and outplacement services, the company said.
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