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RealTime IT News

Sprint Plans Restructuring

Citing the need to create a more competitive cost structure, Sprint Thursday unveiled a restructuring plan for its Sprint PCS division that includes shedding about 1,600 employees -- about 6 percent of the company's workforce -- and 500 contractors.

The company expects a pre-tax charge of about $31 million related to the restructuring in the fourth quarter. It noted that the plan should create annualized cash cost savings of about $170 million when fully implemented.

Sprint said it primarily plans to take the knife to support functions like marketing, IT, network and finance. Only a few of the employees that interact directly with customers are likely to be affected, said Len Lauer, president of Sprint's PCS division.

"Decisions like this are never easy to make, and believe me, this one was not taken lightly," he said.

Lauer noted that many of the staff reductions will be targeted at cutting out layers of management, and also reprioritizing products and services to reduce costs.

"Sprint is committed to customer satisfaction and responsiveness," Lauer said. "With these moves, PCS is reducing layers of management to speed decision making. This will allow us to realize immediate, dramatic and positive impacts on Sprint customers, and deliver the kind of superior service our customers expect and deserve."

Lauer said the cuts will begin within the next few months a Sprint locations nationwide. Sprint said laid-off employees will be paid for a minimum of 60 days after notification, and the company will provide severance packages dependent on tenure with the company. Additionally, it said it is working with other Sprint divisions and outside employers in local areas to help employees find new jobs. The company will also offer professional job placement assistance and counseling.