Sprint Nextel confirmed reports about coming layoffs, announcing that it will cut about 4,000 jobs and close about 8% of its stores in the first half of this year. Sprint hopes the layoffs will trim labor costs by an annual rate of $700 to $800 million. The company said the cuts will be across the company, including managers.
Sprint also said it anticipates “continued downward pressure on subscriber trends, revenues and profitability” for the coming year. The company said it will close more than 4,000 third-party distribution points and resellers and close about 125 branded retail stores.
Shares in the troubled carrier fell 19% in morning trading, as it reported losses of 683,000 monthly subscribers and 202,00 prepaid subscribers for the quarter. However, its Boost Unlimited prepaid brand saw growth of 256,000 users. Sprint said its subscriber base was 53.8 million at the end of last year, with 40.8 million post-paid or monthly customers.
The third largest U.S. carrier has been steadily losing market share to larger rivals AT&T and Verizon Wireless, though cutbacks are part of recently hired CEO Dan Hesse’s plan to bring the carrier back to profitability.
Filed Under: Infrastructure