Sprint Nextel plans extensive firings as newly installed Chief Executive Officer Dan Hesse seeks to show investors a new commitment to efficiency and cost discipline.
The scale of the firings isn't clear, but they are likely to be in the range of a few thousand, apparently. The company, which has about 60,000 employees, let 5,000 workers go last year.
Sprint, the nation's No. 3 wireless carrier by subscribers, is among several US companies that have said the country's housing crunch and economic downturn have taken a toll on their business. But the cutbacks appear to be a response to Sprint's generally poor operational performance in the past year, not a result of a slowing economy. Sprint, which has 54 million wireless customers, is lagging far behind AT&T and Verizon Wireless in subscriber additions and is suffering from poor customer service.
Hesse stepped into the top job in December amid deepening investor unease. Formerly CEO of local phone company Embarq -- a Sprint spin-off -- he immediately set out to tackle some administrative issues that had not been addressed since Sprint's 2005 acquisition of Nextel.
Beyond the layoffs, he and other top executives are evaluating a plan to consolidate the company's headquarters to streamline decision-making. To date, the combined company has used Nextel's former offices in Reston, Va., as its official headquarters and a base for about 4,500 employees, while keeping a large operational presence of roughly 13,000 employees in Kansas.
Many Virginia-based employees are worried by the prospect of a headquarters relocation. But it appears that only a few hundred top managers and executives will have to move. The fact that top executives haven't yet united under a single roof has become a symbol of the troubled integration of Sprint and Nextel and a continuing internal cultural rift. No final decisions have been made on the headquarters consolidation. (info fro mThe Wall Street Journal)
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