Telecoms services provider Sprint Nextel has announced plans to cut approximately 8,000 jobs in the first quarter 2009 to reduce internal and external labor costs by approximately $1.2 billion on an annualized basis.
The company also plans to suspend the 401(k) match for 2009, to extend a 2008 suspension of annual salary increases through 2009, and to suspend its tuition reimbursement program for 2009.
The company said the workforce reduction plan includes elimination of approximately 850 jobs under a voluntary separation plan that started late last year. It expects to incur a charge of $300m for severance and related costs.
Last month, the company announced plans to close about 20 call centers to reflect the projected 20% drop in customer calls in 2009.
Dan Hesse, chief executive at Sprint, said: Labor reductions are always the most difficult action to take, but many companies are finding it necessary in this environment. 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.
In November the company reported a net loss of $326m for the third quarter, against a net profit of $64m in the year-ago quarter, on revenue down 12% at $8.8 billion.
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