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Sprint Plans to Cut About 2,000 Additional Positions

November 25, 2003|From Reuters

Telephone company Sprint Corp. said Monday that it would cut about 2,000 jobs, or about 3% of its workforce, as it cuts costs to offset shrinking revenue and weak demand.

Sprint, which employs about 68,000 people and is the No. 4 U.S. long-distance company, said the cuts would affect workers across the company, from the local and wireless units to technology and corporate support staffs.

The Overland Park, Kan., company previously said it aimed to reduce operating expenses 5% to 7% over the next three years, for more than $1 billion in annual savings. It plans to mesh its product lines, automate some network functions and move more services and operations online.

"New management is taking a hard look at their cost structure and seeing where the fat is," said Guzman & Co. analyst Patrick Comack. "I would expect further cuts going forward."

Sprint said it would take charges in the fourth quarter, primarily because of severance benefits. It did not provide details.

Over the last two years, Sprint has cut more than 20,000 jobs, analysts said. Most recently, Sprint said in September that it would use outside contractors to handle some software operations, allowing it to cut a few hundred jobs.

Sprint's job cuts follow last week's news that Verizon Communications Inc., the nation's largest telephone company, will shed 21,600 employees -- almost 10% of its workforce -- who accepted an early-retirement buyout offer.

Meanwhile, local telephone company SBC Communications Inc. has said it would accelerate its job cuts, mostly through attrition. The San Antonio-based company has cut its workforce to about 160,000 employees at the end of the third quarter, down from 189,000 in the third quarter of 2001.

Sprint's FON Group stock added 18 cents to close at $15.56; Sprint's PCS Group gained 26 cents to $4.61. Both trade on the New York Stock Exchange.

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