Wireless carrier Sprint is arranging for its workforce to lessen in size in order to significantly reduce costs. The actual number of jobs to be cut in unknown, but it is estimated the company will save $2 to $2.5 billion. In addition, Sprint has halted any further employment offers.
Sprint spokesman Dave Tovar explained on Thursday the motive behind the carrier’s actions, stating, “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.” The company sent a memo to its employees detailing their intentions, also detailing a change in money management. All expenditures will have to be reviewed by Sprint’s finance department.
Sprint has recently announced its choice to not attend the Federal Communications Commission’s next auction for airwaves in March 2016. The carrier will effectively save several billion dollars though it will be forced to limit itself to the airwaves it currently own. Network upgrades without additional areas of the wireless spectrum are difficult to achieve. Sprint has already been criticized for its slow upgrades. As Sprint’s position in the wireless market continues to slip, its future may become even more uncertain if the potential for its networks to grow isn’t there.
Sprint’s smaller base of customers has prompted them to spend more than previously in an effort to convince potential clients to switch to its services. Promotions can be pricey, and the expenditures required to keep these customers is also substantial. Sprint is currently the fourth largest U.S. carrier with 57.7 million subscribers, behind Verizon Wireless, AT&T, and T-Mobile, its nearest rival.
The mission to cut costs isn’t something new from the carrier. It said earlier that it plans to save $1.5 billion over a period of 12 months. The company spent $7.5 billion in operating expenses in a three month period ending with June. The $2.5 billion is a high estimate for the potential cost reductions as a result of layoffs. 31,000 people currently have jobs at Sprint Corp., and, despite not revealing the specific number of cuts, the quantity of those who will be looking for a job is sure to be significant.
Tovar has suggested that discussing any specifics is “premature” because Sprint is still only beginning its transition.