Sprint Corp plans to cut around 6% of the workforce at its cellular PCS unit in a move to save $170m a year at the loss-making operation. The Overland Park, Kansas-based operator will lay off 1,600 employees, dismiss 500 contractors, and take a $31m charge in its fourth quarter for severance costs.
The company said the cut-backs will make it a more efficient operation, and it insisted it is reducing layers of management to speed decision-making that will enable the company to realize immediate, dramatic and positive impacts on its customers.
Cynics might point to the fact that the PCS share price has slid from $27.50 to $4.34 in the past year, and it urgently needs the boost that would come from an improved bottom line.
Figures released last month for its third quarter to September 30, showed the PCS group had trimmed its net loss to $10m, from a loss of $291m on revenue up 19% at $3bn. However, a purge on its less credit-worthy customers saw it only add a net 22,000 in the third quarter to take the total to 17 million.