Sprint Slashes More Workers

Sprint Nextel Corp. plans to cut as many as 2,500 jobs by the end of the year in an effort to cut annual costs by at least $350 million.

The Overland Park-based wireless carrier said in a Monday release that it would eliminate 2,000 to 2,500 positions companywide, varying throughout geographic locations, with many jobs cut by Dec. 31.

Sprint said it was making the cuts carefully “to ensure that there is no impact on the improved customer experience,” the release said. A Sprint spokeswoman said she did not know how many layoffs might be in the Kansas City area because decisions about the cuts still were being made.

Sprint had 42,000 employees companywide as of Sept. 30, with 7,300 of them in the metro area.

Sprint has been trying to align its costs with shrinking revenue, prompted by consistent customer defections. The company lost nearly half a billion dollars and 545,000 net wireless customers in the third quarter, which concluded Sept. 30.

In a memo to Sprint employees, CEO Dan Hesse said the company “cannot cut costs fast enough to offset the revenue declines we’ve sustained over the past year.”

“We must have a cost structure that ensures we can continue to generate enough cash to continue running a competitive business and remain financially sound,” he told employees.

The company is doing better at attracting new subscribers, and if that progress continues, this cut could be the last “for some time,” he said. But he noted the cutthroat nature of the wireless industry and the harsh economy.

Displaced employees will get severance benefits and outplacement services. The cuts probably will bring a charge of $60 million to $80 million in the fourth quarter, the release said.

The announcement includes the cuts announced earlier this month in the wholesale division; a spokeswoman at the time said the cuts would include fewer than 100 of the division’s 575 employees, most of whom are in the metro area.Sprint also is reducing contractor and outside labor, as evidenced by its discontinuing use of 27 call centers in the last seven quarters.

In an Oct. 29 call discussing third-quarter earnings, Sprint CFO Bob Brust said the company would continue to be aggressive with costs, reviewing all projects that come up for spending and continuing with cost initiatives in 2010.

In September, Sprint sent 6,000 employees to Ericsson, part of a deal worth as much as $5 billion to let Ericsson take on day-to-day management of its network.

In January of each of the past two years, Sprint announced massive layoffs, including 8,000 workers this year and 4,000 jobs in January 2008.

Sprint, the nation’s third-largest wireless carrier with 48.3 million customers, ranks No. 1 on the Kansas City Business Journal’s list of the area’s top public companies.