Sprint Corp (NYSE:S) is trimming its workforce by eliminating as many as 2,500 jobs as part of an ongoing restructuring plan. The latest layoff represents 7% of the company’s total workforce and will consequently result in the shutdown of a number of call centers.
Cost Saving Measures
The restructuring of the workforce, as well as call centers, is part of the company’s plan to save up to $2.5 billion in costs. Most of the layoffs targeted workers working at call centers according to people familiar with the matter. It has already shut down call centers in Virginia, New Mexico, and Texas
The layoffs also targeted 574 positions at the company’s headquarters on Overland Kansas according to the company’s spokesperson. Most of the affected employees have already been informed through email Sprint having set January 30 as the deadline to qualify for better severance benefits.
“We are in the process of significantly taking costs out of the business so the transformation of the company will be sustainable for the long-term,” Sprint in a statement.
Concerns over Dwindling Cash Balance
Sprint Corp (NYSE:S) finds itself in a tight spot as its cash supply continues to dwindle faster than it is generating. The company has almost half the amount of cash it had at the beginning of last year. Proposed cost cut measures are expected to streamline the company’s operations while maintaining a stable cash balance.
Proposed cost cut measures will target a range of areas including infrastructure and trimming of roaming fees. It has already initiated new measures as part of an effort to boost subscriber numbers as part of a turnaround spearheaded by CEO, Marcelo Claure.
The stock has underperformed in the larger industry as investors remain wary of the company’s long-term growth prospects. Sprint Corp (NYSE:S) is set to report its earnings this week as investors remain confident in the company posting a fifth consecutive quarter of subscriber growth. A move to undercut rivals on pricing continues to fuel subscriber growth but with growing concerns over its impact on profit margin in the short term.
