It may not be the best of times for a Sprint employee. The nation's fourth largest carrier has announced a significant cut in severance pay as it follows through with plans to decrease its expenses by a massive $2.5 billion.
Sprint is planning layoffs in order to cut spending substantially within the next six months. Though the company hasn't specified the number of employees that can expect to be a part of this initiative, the billions needed in saved expenses hints at a more than trivial number. Sprint has also kept the timing of these layoffs a secret, but the company has said that there has not been a set date for the layoffs to end, meaning any number of employees could leave the company at several points.
At Sprint, employees handed the pink slip would traditionally receive severance pay amounting to two weeks for every full year they worked at the company. This policy will change due to cost-saving measures. If an employee is laid off after January 30 of next year, they can only expect to receive one week of severance for every year at Sprint. In addition to this 50% decrease, Sprint's $1,000 separation lump sum payment will not be provided. If an employee is notified before the end of January, they will continue to receive the previous standard in severance pay and other benefits.
Sprint would stand to benefit if it waited for these new policies to come into play before laying off a number of employees. However, spokesperson Melinda Tiemeyer has stated that "there will be notification before that date. We're not waiting until then."
The mobile carrier is taking its cost saving measures very seriously and implementing them across the board. Executives are no longer able to rent limousines for a full day and are instead pointed to cab hailing services. Even snacks for the higher-ups is history. Paper will no longer be used at Sprint, and the company is going as far as taking away trash cans that would normally store paper waste. In fact, there won't be trash cans anywhere in Sprint headquarters, with everyone from the CEO down required to take care of their own garbage. It's perhaps needless to say that no pay raises will be given this year.
Times are tough for the carrier, which has laid off thousands of employees within the last two years. Despite the drop in severance benefits, employment law attorney Chris Hedican has said the new policy is "a little better than average." The company's cost-saving measures may seem intensive, but it all follows Sprint CEO Marcelo Claure's attempt to increase the carrier's profitability. If all goes according to plan, Sprint will develop into a more competitive rival to the likes of Verizon Wireless, AT&T, and T-Mobile.