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Sprint Cuts Jobs, Bets on Bundles

Sprint announced today it will cut 1,100 workers, a move prompted by a steady decline in business from its long-distance service customer base.

"Our intent is to sell packaged integrated services -- local, long-distance and wireless," Mark Bonavia, a Sprint spokesman, told internetnews.com. "It's not the best time to be selling [standalone long-distance]."

The Overland, Kan., company says the packaged offerings help them win new customers and retain existing ones through discounts and low-hassle billing.

On the business side, Sprint is focused on providing managed network services, such as VoIP, to corporations and government agencies.

The job reductions affect up to 850 Sprint Business Solutions workers and up to 250 corporate support staffers, including IT employees. The Kansas City area will lose about half the jobs, with the rest being spread throughout other U.S. offices. Workers will learn by mid-July if they will be laid off. Those who are will receive severance pay and job-search assistance.

This latest round of cuts brings Sprint's 2004 layoff total to 5,000 and more than 24,000 positions since 2001.

Like fellow long-distance carriers AT&T and MCI, Sprint has watched wireless offerings eat into its traditional customer base. More recently, the company faces a challenge from Baby Bells that offer long-distance and upstart broadband telephony players.

In response, Sprint is making network investments with convergence in mind. It's in the early stages of deploying Nortel softswitches to handle VOIP, wireless, enterprise data, cable, and local and long-distance voice traffic.

Despite the need to reduce its workforce, Sprint reaffirmed that full-year earnings will be between 70 cents and 75 cents per share and free cash flow will be approximately $1.8 billion.

Sprint said stronger performance in the PCS wireless division and steady performance in the local division will offset lower-than-expected revenues from its overseas division. The company will release second quarter earnings on July 22. Shares of Sprint stock were off about 2 percent at midday.