Citing an internal memo circulated this week, the Wall Street Journal reports that Sprint, the USA carrier owned by Japanese SoftBank, is planning $2.5 billion in cost cuts over the next six months including job reductions and a hiring freeze.
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As part of his turnaround plan in his first year on the job, Claure has focused on network improvements, half-price offers and tablet promotions to lure customers.
“Recently we communicated with Sprint employees to update them on the progress we are making to transform our business”.
This news isn’t surprising seeing how much Sprint has been struggling lately. Sprint’s cost-savings target in that round was $1.5 billion. Sprint, with 57.7 million customers, fell to the nation’s fourth largest wireless carrier in August, behind T-Mobile. He also trimmed operating expenses that boosted earnings to $2.08 billion in the first quarter ended June 30, beating average analysts’ estimate of $1.8 billion.
The announcement comes days after Sprint said it would sit out the next major auction of wireless airwaves, which will save the company billions of dollars but limit its options for network upgrades in the long run.
Sprint CEO Marcelo Claure hinted at the move in comments made last month at the Goldman Sachs-hosted Communicopia event.
Translation: we’d rather not spend our money on that right now.
The company said in a statement that it must change its structure so it can spur its growth and work more effectively. “It is likely that a few jobs will be impacted but it’s premature to discuss the details as we are in the early stages of the process”.
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“We have begun an effort to significantly take costs out of the business so the transformation of the company will be sustainable for the long-term”, Sprint spokesman Dave Tovar told Reuters in an email.
