The move is expected to save the company $145 million per year. However, Sprint will take pretax charges of about $85 million in the fourth quarter related to severance and other costs.About $55 million of the severance and other exit costs, as well as $95 million of the annualized cash savings, will be included in results for Sprint's FON Group. The remainder of the costs, and of the cash savings, will be included in the company's PCS Group results.
Currently, each of Sprint's primary divisions--local telephone, global markets and PCS--has its own network, IT, customer credit, billing and collections units. The plan calls for network operations at the global markets and PCS units to be combined with planning and data operations in the local telephone division. The IT divisions in each unit will also be combined into a single organization, as will billing and accounts receivable.
The company now has about 75,000 workers.
About 1,000 of the jobs to be eliminated are positions that will become redundant when the operations merge, the company said. The remainder are being cut as part of an effort to "maintain a competitive cost structure," Sprint President Ronald LeMay said in a release.
Westwood, Kan.-based Sprint recentlyof 1,660 people in its PCS division as part of cost cutting.