Sprint revealed plans to lay off unspecified number of employees from its workforce by the end of this month to reduce costs and improve operational efficiencies.
Sprint, the third largest wireless carrier in the U.S., is not willing to give up its dominance over T-Mobile and has come up with strategies to improve its workings and margins. With T-Mobile's promise to take the third spot in the U.S. wireless industry by the end of this year, Sprint announced plans to layoff undisclosed number of its workforce to "improve operational efficiencies and reduce costs."
The new change does not come as a surprise as Sprint's newly appointed CEO Marcelo Claure revealed in August that the carrier will start cost reductions through job layoffs, The Inquirer reports. The latest confirmation comes via Sprint's filing at the U.S. Securities and Exchange Commission on Friday. The workforce reduction plan is expected to conclude by October 31, 2014, according to the filing.
"On September 30, 2014, Sprint Corporation (the 'Company') began implementation of a workforce reduction plan to reduce costs and help become more competitive in the marketplace," the filing reads.
"The plan is expected to include steps to, among other things, improve operational efficiencies and reduce costs, as a result of which the Company expects to incur material charges under generally accepted accounting principles. This planned reduction is expected to be largely completed by October 31, 2014 and will include certain management and non-management positions."
The first round of job cuts will not be the end of it, as Sprint is expected to further continue the layoffs in the future. But it remains unclear how the carrier aims to improve its customer service front by letting go a large chunk of its management. The carrier has set aside $160 million in order to carry out the layoffs and cover severance packages, according to the filing.
It is essential for Sprint to quickly guard up its third spot and aim for a higher rank as T-Mobile is quickly moving up the ladder. It added 2.75 million new customers in August alone while Sprint lost four times the customers, which is quite alarming as the competition gets intense.
