- Third round of firings mostly affect customer service jobs
- No. 4 U.S. carrier is trying to shed $2.5 billion in expenses
Sprint Corp., the nation’s fourth-largest wireless carrier, is eliminating 2,500 jobs, or about 7 percent of its total workforce, and closing several call centers as part of a plan to cut $2.5 billion in costs, according to a person familiar with the situation.
Most of the job cuts are coming from the closing call centers, said the person, who requested anonymity because the cuts haven’t been disclosed publicly. Employees were informed of the cuts in an e-mail Friday, the person said. Jan. 30 is the deadline to qualify for better severance benefits.
“We are in the process of significantly taking costs out of the business so the transformation of the company will be sustainable for the long-term,” the company said in a statement Monday that didn’t include the number of jobs cut. “We are leaving no stone unturned as we work to eliminate up to $2.5 billion of costs from our business. Unfortunately, as we’ve said over the past several months, the effort to reduce our costs would impact all areas of our business, including jobs.”
The carrier is trying to conserve a dwindling cash supply and boost subscriber numbers as part of a turnaround plan led by Chief Executive Officer Marcelo Claure. Stocks and bonds plunged to multiyear lows last week as investors grew more pessimistic about the company’s ability to pay down debt.
Sprint reports its fiscal third-quarter results Tuesday, having moved up the date by a week to quell concerns. The company is estimated to have added subscribers for the fifth straight quarter after undercutting rivals on price. Yet that strategy is taking a toll on the balance sheet: Sprint now has about half the cash and cash equivalents it had just a year ago. It had a little more than $2 billion of cash and short-term investments on its books as of the end of September, which is about equal to the debt it has to refinance in 2016.
To cut costs, the carrier is exploring a range of areas, including infrastructure, roaming fees paid to other carriers to handle calls outside the reach of its network and wireless tower placement.
“The steps we are taking to transform our business will help us deliver an even stronger customer experience and help build a sustainable business for the foreseeable future,” Sprint said in the statement.
Sprint dropped 12 percent to $2.52 at the close in New York. On Friday, the shares had climbed the most in 2 1/2 years after moving up the date it will report earnings.
The carrier’s $4.25 billion of 7.875 percent bonds due in 2023 rose 0.6 cent to 66 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.
The Kansas City Star earlier reported the cuts.