Sprint Disconnects 2,100 Workers
Battered telecommunications company Sprint Corp. said Wednesday it will lay off 2,100 more employees during the next year as it tries to reorganize and return to profitability.
The job cuts are too small to raise the country's unemployment rate — which leapt to 6 percent last month — but were a reminder than many companies are still struggling despite low inflation, rock-bottom interest rates, modest growth and soaring worker productivity.
The Overland Park, Kan., company said it will combine network, information technology and billing operations for several of its divisions as a way to save up to $145 million a year.
The layoffs are the latest in a series Sprint has made to try to stop losses. The telecommunications industry has been in a deep funk for several years.
Last month, Sprint PCS, the company's wireless division, laid off about 1,600 workers, or six percent of the division's work force. About 660 of the jobs were in the Kansas City area. PCS also released about 500 contractors.
PCS President Len Lauer said at the time that the layoffs were part of the company's efforts to reorganize by getting rid of management and streamline products and services to cut costs.
Sprint, the nation's third largest long-distance provider and fourth-largest wireless provider, has laid off more than 13,000 employees in the last year as the company tries to cut costs.
"The consolidations we are announcing today are a necessary step if we are to capitalize on our strength, which is the ability to offer a complete portfolio of wireline and wireless voice, data and Internet services under a single brand at a competitive price," said William T. Esrey, Sprint's chairman and chief executive officer.
The company said the goal of the reorganization will be to create one division to handle all local, long-distance, Internet and wireless network needs for its customers.
Sprint now has separate divisions for local telephone, wireless and other services.
Sprint PCS closed trading Tuesday at $5.05, up 5 cents; Sprint FON closed at $14.16, down 27 cents.
The 2,100 layoffs include about 1,000 job cuts that are a direct result of the consolidation; 600 will be in network services, 300 will be in information technology and 150 will be in billing and accounts receivable.
The other 1,100 job cuts are chiefly an effort to cut costs; 450 will be in local telephone operations; 300 will be in global markets and 200 will be from corporate center staff.
About half of the layoffs will be in Kansas City and the rest will be spread throughout the country, all over the course of the next year, said Bill White, a Sprint spokesman.
After the layoffs, the company expects to employ about 72,000 workers.
The Labor Department's most recent unemployment report said the communication industry as a whole was still bleeding jobs, shedding 156,000 since April 2001.