Sprint to Send Home 2500 for Xmas

November 9th, 2009 by · 3 Comments

Sprint Nextel (NYSE:S, news, filings) has announced more layoffs to the tune of 2000-2500 by the end of the year, which includes some reductions mentioned last week or so in the wholesale group and will be from across the company.  They will also be cutting back on outside contractors and other labor costs.  The company is looking to find annual savings of some $350M annually and will take a charge of $60-80M in the fourth quarter for severance and such.

For those affected, I hope you all land on your feet – to say this is a tough time to be looking for a new job is definitely understating things.  I can’t say I’m surprised though.  While Sprint has slowed its downward revenue spiral, they have not reversed it and to keep costs in line such actions were probably inevitable.  And they probably aren’t the only company to be announcing further cutbacks, the annual holiday layoff parade seems to be underway – hopefully it won’t have more floats than necessary.

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Categories: Financials · Internet Backbones · Wireless

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3 Comments So Far

  • Parkite says:

    This is the part of the release that I found interesting:

    In this period, the company has been able to discontinue the use of 27 call centers as call volume has decreased in the wake of service improvements. Furthermore, the company’s networks continue to operate with current best-ever metrics and has resulted in Sprint being named by PC World Magazine as having the most reliable network.

    So they are closing 27 call centers b/c their service is so good? Good problem to have, I think???

    Note to Sprint employees – Continued good service will be followed with more layoffs!!!

  • Anonymous says:

    The 20% run today could be attributed to the $350 million in cost savings alone. Based on the current enterprise value/EBITDA multiple divided by the o/s shares, you get something in the neighborhood of 0.40 – 0.50 cents of value.

  • DaveRusin says:

    On the same day they announce 2500 head counts slashed to be more “competitive” – Sprint also announces a $1.5 billion investment into Clearwire …

    Go figure …

    I can remember the consolidating years of the 1990’s when all sorts of LD companies at one time were showing record profits and slashing heads to be “more competitive.”

    It leaves me to ponder a few things – who let in 2500 heads you can afford to let go without crippling your business – that person should be fired. Telecoms is a services business which requires people to deliver those services … so how does cutting heads make you a better competitor?

    Or is Sprint just playing the price game with declining margins. flat or declining revenue growth …

    No one has ever cut themselves to success.

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