Sprint cuts 2000 jobs, more leadership changes to come

Mon Nov 3, 2014 6:59pm EST
 
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By Marina Lopes

WASHINGTON (Reuters) - Sprint Corp (S.N: Quote) announced on Monday it will fire 2,000 employees and it cut its 2014 adjusted earnings forecast as the company attempts to reduce costs and turn around several quarters of losses.

The layoffs are expected to lower labor costs by $400 million a year and are the latest job cuts by the third largest U.S. carrier.

The company reduced its forecasts for 2014 adjusted earnings to between $5.8 billion and $5.9 billion from $6.7 billion to $6.9 billion.

"My job as CEO is to make sure that all costs reflect the value that we are going to provide to the market. I said on day one to all my employees that we were going to take costs out and there will be layoffs," Marcelo Claure told Reuters in an interview.

More job cuts are not expected, although the company is always looking for ways to cut costs, he added.

Sprint expects to eliminate $1.5 billion in annual expenses, and hopes the cuts will offset service revenue declines as contract customers switch carriers.

"He has to cut costs, that’s the easiest away to show he is doing something overall," said Roger Entner, analyst at Recon Analytics. "He needs to get aggressive with pricing to attract more customers, but most importantly he needs a better network."

Sprint has been undergoing a painful revamping of its network that has caused a mass exodus of subscribers. The carrier, which appointed Claure as chief executive officer in August, has been cutting prices aggressively, doubling the data its competitors offer.   Continued...

 
A woman uses her phone as she walks past a Sprint store in New York's financial district, October 15, 2012. REUTERS/Brendan McDermid