Sprint has just announced they intend to "reduce labor costs". The company is expecting a charge of about $300 Million in the first quarter, for severance packages and other costs related to the elimination of almost 8,000 jobs. The cost cutting measure is a way for Sprint to offer more competitive price structures in the current economic landscape.
"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."Sprint has seen incredible turn around in the area of customer care. They are currently reporting fewer calls per subscriber to customer care, with more one call resolution. Customer facing positions will be less impacted than any other portion of the company.
During the second half of 2008, Sprint was able to repay almost $2 Billion in debt, and has built its reserves sufficiently to allow enough liquidity to allow Sprint to pay its debts for the next 2 years. By the end of the 3rd quarter 2008 Sprints cash reserves totaled $4.1 Billion. Sprint expected to generate free cash flow during the entire 4th quarter.
Further cost reduction methods for the company will include the suspension of the companies 401(k) match for 2009. Sprint has further announced their 2008 4th quarter results will be released February 19th. The information for attending the earnings call will be sent out 1 week prior to this release.