Sprint Starts Cutting Jobs to Boost Competitive EdgeScott Moritz
Sprint Corp. said it’s eliminating an unspecified number of jobs as the new chief executive officer of the third-largest U.S. wireless carrier looks to create a leaner business model amid heightened price competition.
The workforce reduction of management and non-management positions will result in a $160 million expense for severance and other costs in the fiscal second quarter, the Overland Park, Kansas-based company said yesterday in a regulatory filing. The job cuts began on Sept. 30 and will largely be completed by Oct. 31.
In his first day in the role in August, CEO Marcelo Claure told employees to expect cuts and a more vigorous competitive edge. He said Sprint needs to have the lowest cost of service in order to deliver the best value to customers. Claure was hired by Sprint Chairman Masayoshi Son after the company scrapped a plan to combine with T-Mobile US Inc.
“To do that, we started a comprehensive review looking at every dollar that is spent, and if there are things that don’t make sense, we will cut them fast,” Claure, the former CEO of Brightstar Corp., said in August. “I come from a low-cost industry, and I’m going to try to apply some of that methodology.”
Sprint’s shares, unchanged at $6.25 at the close in New York yesterday, have tumbled 42 percent this year.
The filing didn’t specify how many jobs will be lost. Scott Sloat, a Sprint spokesman, said the reductions target employees in IT, network and technology groups who had been working on the company’s Network Vision upgrades.
“Since Network Vision is largely complete, we are staffing accordingly,” Sloat said. Sprint is focusing on expanding its Spark network using a new swath of spectrum in the 2.5 gigahertz range, he said.
“We are still working through the details so exact numbers and locations are not available at this time,” Sloat said.