Sprint to cut fiscal 2016 expenses by $2.5 bn
02 Nov 2015
The fourth-largest wireless network operator in the US, Sprint Corp, yesterday said it aimed to cut fiscal 2016 expenses by as much as $2.5 billion through layoffs and a wide array of cost controls, as an essential component of its ongoing turnaround efforts.
"We are leaving no stone unturned and looking at all areas," company spokesman Dave Tovar said in an interview with Reuters.
He declined to put a figure to the employees that would be laid off, as it was too early in the budgeting process.
The estimated cost savings for Sprint, which boasts a 31,000 strong workforce, would be equivalent to about 10 per cent of its current annual operating costs of $26 billion.
The ratio of the company's capital expenditures to its sales was over 20 per cent, which according to Tovar was higher than for other wireless carriers. "We are trying to get more in line with the industry average," he said.
He added Sprint would provide more details about the job cuts tomorrow and the company's plans to bolster the quality, speed and capacity of its wireless network, when it reported fiscal second-quarter results.
Savings were also expected to come from cutting severance for laid off employees and temporarily eliminating raises.
Meanwhile, The Wall Street Journal reported, Sprint employees are starting to feel the pinch after years of struggles at the shrinking wireless carrier.
The bad news was broken by Sprint CEO Marcelo Claure employees in a memo obtained by newspaper. Free water bottles and yogurts are being scrapped along with a broader snacks programme that was introduced earlier this year. It apparently cost $600,000 per year, and Sprint was now trying to make every dollar count.
But that is not all as a freeze on raises is set to kick in and cuts in severance pay, and increasing out-of-pocket healthcare costs.
Apparently, it would not be just the rank and file which would feel the squeeze - executives would now be barred from hiring limos during business travel and would need to settle for taxis or Uber to travel.
Last month Bloomberg had reported of Sprint's plans to cut costs by $2-$2.5 billion through job cuts. (See: Sprint to slash $2.5 bn through job cuts: Reports).
