Subject: [NEXTEL-1] Sprint to cut 1,600 jobs from wireless unit

From: "meijin" <[email-masked]>
Date: Thu, 14 Nov 2002 12:21:40 -0600

Sprint to cut 1,600 jobs from wireless unit

OVERLAND PARK, Kan. (Reuters) - Sprint (FON), the No. 3 U.S. long-distance telephone company, said Thursday it will cut 1,600 jobs and 500 contractors from the payroll of its PCS wireless unit (PCS) to trim costs.

The company said the 1,600 full-time job cuts will be completed within the next few months at Sprint locations across the country. They will represent about 6% of the PCS division's workforce.

Guzman analyst Patrick Comack said it was a good first step, but doesn't address the PCS unit's core problem of customer turnover, or "churn."

"This is good, but this doesn't tackle the big issues really haunting Sprint right now," said Comack, who rates both Sprint and its PCS tracking stock as "perform in line," which is equal to a neutral rating. "Sprint's real problems are its churn rate, its network quality, its customer service."

Comack does not own either stock. Guzman does have a banking relationship with Sprint.

The severance costs associated with the job cuts are expected to result in a pretax charge of about $31 million in the fourth quarter, Sprint said. When fully implemented, the cuts are expected to result in annualized savings of about $170 million.

"With these moves, PCS is reducing layers of management to speed decision making," PCS President Len Lauer said in a statement. Lauer moved over from Sprint's long-distance operations recently to lead PCS.

He said only a small number of jobs being eliminated deal with customers directly. Most are in support functions such as marketing, information technology, network and finance.

Sprint said employees who lose their jobs will be paid for a minimum of 60 days after notification. Severance packages will vary depending on tenure at the company.