Sprint Cuts 2,000 Jobs As Customer Losses Mount

Sprint said Monday it's cutting costs and eliminating roughly 2,000 jobs, as the wireless carrier continues to lose subscribers to rivals including Verizon and AT&T.

The layoffs, which follow an earlier round of cuts in March, are part of a broader effort by Sprint to trim its annual costs by $1.5 billion.

The cuts come just three months after Sprint, the third largest wireless carrier in the U.S., named Marcelo Claure, the former CEO of Brightstar, a SoftBank subsidiary, as its new CEO.

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SoftBank acquired Sprint last year for $21.6 billion.

Claure said Monday the layoffs represent the first of several steps he plans to take to curb Sprint's mounting financial and customer losses.

"We have started a transformational journey," Claure said in a statement. "While the company continues to face headwinds, we have begun the first phase of our plan and are encouraged with the early results. Every day we are focused on improving our standing with consumers, improving our network and controlling our costs."

Andrew Pryfogle, senior vice president of cloud transformation at Intelisys, a Petaluma, Calif.-based master agent and Sprint partner, said he welcomes Claure's efforts to refocus and streamline resources at Sprint.

"We've recently seen a renewed commitment to the channel by Sprint," Pryfogle wrote in an email to CRN. "I expect this move is simply aligning resources toward a more cost-effective indirect strategy, which we welcome."

In its second-quarter earnings results, also released Monday, Sprint reported a loss of $765 million for the three-month period, which ended Sept. 30. In the same quarter last year, Sprint reported a loss of $699 million.

Revenue for the quarter was $8.5 billion, up from $7.7 billion compared with the same quarter last year, but still below analyst estimates, according to Thomson Reuters I/B/E/S.

Sprint said it lost 272,000 postpaid wireless subscribers in the second quarter, adding to the 181,000 it lost in the previous quarter.

Overland Park, Kan.-based Sprint continues to face tough competition from rivals including Verizon and AT&T, which are the U.S.' No. 1 and No. 2 biggest carriers, respectively. Verizon, for its part, said last month it gained 1.5 million new subscribers in its third quarter alone.

Sprint this year was in talks to acquire T-Mobile, the fourth largest carrier, in a deal observers said could help both companies compete more effectively against Verizon and AT&T. That deal, however, was called off in August because of regulatory opposition.

Looking ahead, Sprint said it expects subscriber drop-off to continue to hurt its wireless revenue as it moves into the third quarter. The carrier also lowered its annual earnings outlook to between $5.8 billion and $5.9 billion, down from an earlier projection of $6.7 billion to $6.9 billion.

PUBLISHED NOV. 4, 2014