Sprint cuts 8,000 jobs as US telecos face economic woes

If British tech and telecom firms thought they had it bad during the economic downturn, they only have to look across the Atlantic to see it's not all sweet apple pie for their North American counterparts.

Yesterday, Sprint Nextel, the US's third-largest mobile phone carrier, announced it would have to slash a further 8,000 employees from its already rapidly depleting workforce, slicing a 14 per cent chunk out of the firm's 56,000 strong workforce.

With recession the name of the game - and with Sprint hemorrhaging subscribers quicker than you can say 'shaky long term prospects' - the firm is desperately trying to cut annual costs by at least $1.2 billion (0.84 billion).

This fresh round of lay-offs comes hot on the heels of last year's, which saw 4,000 employees handed pink slips and 125 retail centres closed down.

In a statement, Sprint said the lay-offs, would be completed by the end of March.

Approximately 850 employees are said to have taken voluntary redundancy, with Sprint noting it would be writing down a first-quarter charge of over $300 million in severance fees.

The troubled telco also said it be forced to this year suspend its 401(k) match plan - allowing employees to have their salaries invested to save for retirement - along with a tuition reimbursement programme. An already implemented freeze on salaries has also been extended.

The credit crisis withstanding, Sprint has been struggling since its 2005 acquisition of Nextel, after execs failed to properly consolidate the firms together. Technical problems and tough competition from smartphone making rivals like Apple compounded the bad situation, as subscribers dropped out of Sprint's race and switched to AT&T.

That's not to say, however, that AT&T is laughing all the way to the bank. Recessions don't make for happy endings, and last month the firm announced it would be cutting 12,000 jobs, or some four per cent of its workforce, in order to face the financial crisis.

AT&T, which offers subscribers the iPhone, will have another tough year of battling Sprint again in 2009. In the second half of 2009, Sprint will become the exclusive Palm Pre smart phone seller, a touchscreen beauty expected to give the iPhone a good run for its money.


ITPro is a global business technology website providing the latest news, analysis, and business insight for IT decision-makers. Whether it's cyber security, cloud computing, IT infrastructure, or business strategy, we aim to equip leaders with the data they need to make informed IT investments.

For regular updates delivered to your inbox and social feeds, be sure to sign up to our daily newsletter and follow on us LinkedIn and Twitter.