Sprint plans to layoff an unspecified number of personnel and cut a variety of control costs to reduce as much as $2.5 billion in expenses. The wireless carrier says that it's part of its current turnaround efforts, which was necessitated because of its history of subscriber losses and monthly leasing plans that require wireless carriers to pay vendors up front to get devices.
With a workforce of about 31,000 people under the company, employees relieved of their duty after Jan. 30 will receive one week of pay for every year worked instead of the previous two weeks' worth of pay.
Moving forward, Sprint is determined to slash down operating expenses as much as possible.
"We are leaving no stone unturned and looking at all areas," Dave Tovar, Sprint's spokesman, says in an interview.
Considering Sprint's current $26 billion annual operating costs, the cost-cutting measures will amount to about 10 percent of that figure. Also, compared to other wireless carriers, the ratio of its capital expenditures to its sales is higher, which adds up to more than 20 percent.
"We are trying to get more in line with the industry average," Tovar continues.
As of right now, Tovar didn't specify how many employees would be laid-off, as it was too early in the budgeting process. On Tuesday, Nov. 3, Sprint will give out more details about the job cuts when it reports fiscal second-quarter results. Also, the wireless carrier will disclose its plans on how to improve the quality, speed and capacity of its networks then.
On top of those measures, Sprint intends to cut severance for laid off employees and to stop giving out raises for a limited time.
According to Sprint's first-quarter report, which ended on June 30, its net loss amounted to $20 million. Compared to last year's net income of $23 million, the company incurred quite a hard blow this time.
Softbank Corp, majority shareholder of Sprint, says that it doesn't intend to sell its stakes in the wireless carrier, calming investors down.
Photo: Mike Mozart | Flickr
