Sprint Planning To Lay Off Thousands: Report
By David Kaplan - Mon 14 Jan 2008 02:24 PM PST
Sprint Nextel CEO Dan Hesse expects to cut several thousand jobs to demonstrate his promise to instill greater efficiencies and cost savings, WSJ reports. No clear numbers were available yet. In the past year, Sprint (NYSE: S) has slashed 5,000 jobs of its nearly 60,000 workforce.
Sprint has cited larger economic factors, such as the housing crisis, for putting downward pressure on profits. But the impending job losses are primarily due to its poor operational performance over the past several months. In December, Sprint brought in Hesse, the CEO of Embarq, to serve as president and CEO. He replaced Gary Forsee, who resigned from the post in October as investors and its board began voicing increasing disappointment with him. Embarq was spun out of Sprint in 2006. Hesse had held executive positions at Sprint before his stint there.
In terms of the layoffs, Sprint had already been working on plans to integrate staffers from the Reston, VA., headquarters, which it got when it merged with Nextel in 2005, and Sprint’s base in Overland Park, Kansas. Apart from those issues, Hesse has to manage the heavy costs related to the build-out of its WiMAX broadband wireless network. The company’s intention to invest roughly $5 billion in the venture has added to investors’ worries.
-- Update: Sprint’s Q3 net operating revenues were $10 billion, down from $10.5 billion a year ago. Net income was $64 million in the quarter, down from $279 million a year ago. Investors can expect more of the same in Q4, as TheStreet.com reported that the number three wireless carrier lost more than 500,000 customers in Q4. Furthermore, analysts anticipate Hesse to hold off on any financial guidance or investor updates until April, when he’s completed the completes his strategic review.
Posted in: Companies, Operators, SprintNextel
