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Sprint needs to cut $2.5 billion and jobs to save costs
US carrier Sprint is looking to cut around $2 – 2.5 billion in costs over the next six months, according to an internal memo seen by the Wall Street Journal, which could result in a substantial round of layoffs.
According to the memo, Sprint’s new chief financial officer stated that external hiring will be frozen and that job reductions are inevitably on the way in order to help save on costs. Exact numbers haven’t been mentioned at this early stage, but Sprint currently employs somewhere around 31,000 members of staff. The finance department must now review and approve all expenditures too.
“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,” – Sprint spokesman Dave Tovar
The carrier has apparently been spending too much on acquiring and retaining customers, which has heavily hit the company’s operating margins.
This isn’t a new situation for Sprint either. The company managed to save around $1.5 billion in expenses over the previous 12 months, but this doesn’t appear to have gone far enough to help ease the carrier’s financial woes. Finding another $2.5 billion to cut so quickly is likely to be a much harder task. Sprint also recently announced that it would be sitting out the next major wireless spectrum auction, which will likely hamper the carrier’s ability to upgrade its network down the line.