Report: Sprint CEO plans job cuts

<i>The Wall Street Journal</i> reports that the No. 3 cell phone operator in the country is preparing to lay off thousands of workers to help get its business back on track.

Marguerite Reardon Former senior reporter
Marguerite Reardon started as a CNET News reporter in 2004, covering cellphone services, broadband, citywide Wi-Fi, the Net neutrality debate and the consolidation of the phone companies.
Marguerite Reardon
2 min read

Sprint Nextel is preparing to cut thousands of jobs, according to the The Wall Street Journal.

The company's new CEO, Dan Hesse, is supposedly trying to show investors that he is serious about cutting costs, the newspaper's Web site reported late on Monday. A Sprint representative declined to comment on the story.

Exactly how many people could lose their jobs is not yet known. Last year the company cut about 5,000 jobs. At the end of the last quarter Sprint reported it had roughly 60,000 employees.

Sprint is the third-largest cell phone company in the U.S. behind AT&T and Verizon Wireless. Investors have been unhappy with Sprint's performance for sometime, which actually led to the company's previous CEO, Gary Forsee being forced out in October. Hesse took over as CEO in December.

One of the biggest problems Sprint has faced is retaining customers. Quarter after quarter Sprint has seen customers, especially those from the old Nextel network, leave its service. Hesse who was CEO of Embarq, a spin-off from Sprint, said when he took over that he'd work on improving lingering issues associated with the 2005 acquisition of Nextel Communications.

This could be the first big move the CEO is taking to get the company back on track.

The Journal also reported that Sprint might also consolidate its headquarters in Overland Park, Kan., to "streamline decision making." Right now, Sprint uses Nextel's old headquarters in Reston, Va., as home base with about 4,500 employees there. The bulk of the company's employees--about 13,000 --work in Kansas.

But simply getting more executives under one roof won't solve all of Sprint's problems. The company also faces big questions about what it will do about the WiMax mobile broadband network it's building. The new network, which is costing Sprint $5 billion, is expected to launch in its first cities in April. Before Hesse took over as CEO, the company said it was still committed to building the WiMax network. But now new questions have been raised about how committed the company will be.