Sprint to cut 2,100 more jobs, restructure several divisions

KANSAS CITY, Mo. -- Sprint Corp. announced Wednesday it will cut another 2,100 jobs during the next year as it restructures operations and cuts costs.

The Overland Park, Kan., company said it will combine network, information technology and billing operations for several of its divisions as a way to save up to $145 million a year.

Shares of Sprint FON fell 34 cents to $13.82 in mid-afternoon trading on the New York Stock Exchange; shares of PCS were down 6 cents to $4.99.

The layoffs are the latest in a series Sprint has made to try to stop losses. The telecommunications industry has been in a deep funk for several years.

Last month, Sprint PCS, the company's wireless division, laid off about 1,600 workers, or six percent of the division's work force. About 660 of the jobs were in the Kansas City area. PCS also released about 500 contractors.

PCS President Len Lauer said at the time that the layoffs were part of the company's efforts to reorganize by getting rid of management and streamlining products and services to cut costs.

Sprint, the nation's third largest long-distance provider and fourth-largest wireless provider, has laid off more than 15,000 employees since October 2001.

"The consolidations we are announcing today are a necessary step if we are to capitalize on our strength, which is the ability to offer a complete portfolio of wireline and wireless voice, data and Internet services under a single brand at a competitive price," said William T. Esrey, Sprint's chairman and chief executive officer.

Creating one division

The company said the reorganization's goal is to create one division to handle all local, long-distance, Internet and wireless network needs for its customers.

Sprint now has separate divisions for local telephone, wireless and other services.

Jeff Kagan, an independent analyst based in Atlanta, called the move a "major shift in corporate strategy" that will help Sprint save money. But he said it will also "create some chaos" that hopefully won't affect customers too much.

The 2,100 layoffs include about 1,000 job cuts that are a direct result of the consolidation; 600 will be in network services, 300 will be in information technology and 150 will be in billing and accounts receivable.

The other 1,100 job cuts are chiefly an effort to cut costs; 450 will be in local telephone operations; 300 will be in global markets and 200 will be from corporate center staff.

Half in Kansas City

About half of the layoffs will be in Kansas City and the rest will be spread throughout the country, all over the course of the next year, said Bill White, a Sprint spokesman.

The layoffs are expected to cost Sprint about $85 million during the fourth quarter, which ends Dec. 31.

During the third quarter that ended Sept. 30, Sprint reported earnings of $519 million, compared to a loss of $134 million in the same quarter a year ago.

Sprint FON, which includes the company's long-distance division, recorded earnings of $526 million, compared with earnings of $154 million during the same period last year. Sprint PCS lost $7 million in the third quarter, compared with a $288 million loss in the third quarter of 2001.

After the layoffs, the company expects to employ about 72,000 workers.

Rep. Dennis Moore, D-Kan., whose district includes Sprint's headquarters, said the job cuts were another hit to an already hurting Kansas City area economy.

"These layoffs come at a time when many Kansans are nearing the end of their unemployment benefits," Moore said. "It is clear the economic recovery has not yet taken hold."