Sprint Nextel will eliminate approximately 8,000 jobs this quarter, a move that is expected to reduce internal and external labor costs by approximately $1.2 billion on an annualized basis. The reduction total includes approximately 850 positions expected to be eliminated under a voluntary separation plan started late last year. The company expects to recognize a charge in excess of $300 million in the first quarter of 2009 for severance and related costs associated with the reduction. Sprint will also suspend its 401(k) match for 2009, extend a 2008 suspension of annual salary increases through 2009, and suspend its tuition reimbursement program for 2009.
Sprint noted that it has seen a notable reduction in calls per subscriber to customer care and increased customer satisfaction resulting from customer service improvements. The company is committed to these high standards of customer care and innovation. In line with this commitment, the headcount reductions in these functions will be less than in non-customer facing groups.
“Labor reductions are always the most difficult action to take, but many companies are finding it necessary in this environment,” said Sprint CEO Dan Hesse. “We continue to improve the customer experience and these improvements are reflected in much higher levels of satisfaction in customer surveys and in independent performance tests. Our commitment to quality will not change.”
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- Sprint traces is origins back to the “Brown Telephone Company, which was founded in 1899 in the town of Abilene, Kansas.
