About 850 positions will be shed at the business solutions unit, along with an additional 250 people currently fulfilling roles supporting the group, including some IT staff. Sprint confirmed that nearly half of the individuals affected by the layoffs work in the Kansas City suburb of Overland Park. The affected workers will be informed by mid-July.
The cuts are a result of the decline in the long-distance market in the US as consumers move towards mobile phones, VoIP, and cable telephony options. Long-distance revenue has dropped for 13 straight quarters and Sprint is increasingly relying on wireless gains to boost sales growth.
The cuts are part of CEO Gary Forsee’s attempts to reduce annual costs by $1bn before 2006. Last November it announced it would be trimming 4,650 jobs, or 7% of its 65,000-strong workforce. It has slashed more than 20,000 positions since 2001.
Sprint said in March that it plans to combine the FON Group, covering its landline phone business with the PCS Group, which is its wireless division. It separated the two units in the late 1990s to capitalize on high-growth wireless stocks. However, it is facing legal action from shareholders over the plans and has now received six class action lawsuits alleging breach of fiduciary duty.
Sprint also reaffirmed its prior expectations. It said it expects to make consolidated adjusted earnings of $0.70 to $0.75 per share, and full-year free cash flow of about $1.8bn. It will report its results on July 22.
