Sprint is looking to cut more jobs in an attempt to shore up its bottom line at a time when the carrier’s competitive position has come under attack.
The carrier noted in a Securities and Exchange Commission filing that the “workforce reduction plan” is designed to cut costs and “better meet the changing dynamics of the marketplace.” The cuts are set to include “management and non-management positions,” and be completed by mid-year.
Those cuts are expected to cost Sprint $165 million in charges for the recently completed fourth quarter of 2013. The costs are associated with severance packages and related costs, though it added that “additional material charges are expected in future periods associated with this plan.” Those additional costs are expected to results in further charges through the end of this year.
A Sprint spokesman noted that while the area of the cuts have yet to be announced, the cuts could come from customer care as the carrier has moved aggressively into offering alternative channels and self-care options to customers.
Analysts were not surprised by the move, noting Sprint has operated with an “inflated” cost structure following its acquisition of Nextel in 2005.
“While the human element of such moves is indeed difficult, we believe this reduction was likely overdue and needed,” explained Wells Fargo Securities senior analyst Jennifer Fritzsche in a research note.
Sprint is scheduled to announce fourth quarter financial results on Feb. 11, with analysts expecting the carrier to report losing around 400,000 postpaid customers during the final three months of the year, though the carrier’s prepaid business should continue to help counter those losses.
Japan’s Softbank acquired a controlling stake in Sprint last summer for $21.6 billion, which followed Sprint gaining full control over Clearwire. Softbank has been rumored to be talking with banks regarding a potential acquisition of T-Mobile US in an attempt to consolidate the nation’s No. 3 and No. 4 operators.
Sprint last August cut 800 customer service jobs in an attempt to realign its business segments following the Clearwire and Softbank deals as well as the shuttering of its iDEN network. Sprint also announced executive changes last fall, as CMO Bill Malloy announced plans to retire and chief sales officer Paget Alves left the company.
Sprint cut about 2,500 positions during the fourth quarter of 2009, which followed additional job cuts made throughout that year. Those cuts included the transfer of more than 6,000 employees to Ericsson as part of a network management deal signed between the two companies.
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