Sprint likely to lay off workers as it seeks to cut up to $2.5B in costs
The wireless carrier is looking to slash expenses to make sure its business is sustainable for the long term. It says some jobs will probably be affected.
Sprint is in cost-cutting mode, a process that will likely force it to cut staff.
The Overland Park, Kansas, company plans to cut between $2 billion and $2.5 billion in costs over the next six months.
"We have begun an effort to significantly take costs out of the business so the transformation of the company will be sustainable for the long term," said a Sprint spokesman. "It is likely that some jobs will be impacted but it's premature to discuss the details as we are in the early stages of the process."
The cost cuts were first reported Thursday by The Wall Street Journal, which reviewed an employee memo sent by Sprint's new chief financial officer, Tarek Robbiati. The company also said it will freeze hiring during this period.
The nation's fourth-largest wireless carrier is in the middle of transforming itself into a leaner operation under CEO Marcelo Claure. The cost cuts will help the carrier pour more money into its network, where it's investing in better coverage and service, as well as better afford offering industry-low rates to draw in new customers. As the wireless industry fights for more customers through different deals, it's more critical that Sprint offers a competitive and reliable network. The company has typically ranked last among the four major carriers in terms of network speed and coverage.
The company is also feeling the heat from chief rival T-Mobile, which just passed Sprint as the No. 3 wireless carrier over the summer. The two players have led an industry-wide back-and-forth on new plans and discounts over the past few months. If T-Mobile offers a deal promising a low monthly price to buy or lease a phone, then Sprint tries to undercut it, or vice versa.
Sprint's plan to cut its costs is ambitious. The company spent $2.2 billion in the second quarter ended June 30. It employed around 31,000 workers as of the end of March.
News of the cost cuts comes about a week after Sprint said it won't bid on new spectrum at the Federal Communication Commission's 2016 auction of TV broadcast spectrum, which is expected to be a costly affair for participants.