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Sprint swings axe: Another 2,000 staffers for the chop

Numbers up, down and bad

By Simon Rockman, 4 Nov 2014

Struggling US mobile network Sprint Corp is swinging the axe further and deeper as another 2,000 jobs are to go on top of the nearly 500 announced last month.

The move is part of a $1.5bn cost-cutting plan – of which $400m of the savings will be workforce costs – and following on from results that show a a $765m net loss and a 3.4 per cent drop in total revenues during the quarter.

This is despite the wireless carrier's having increased its customer base: it had 55.04 million subscribers on its books at the end of September, compared with 54.55 million in the previous quarter and 54.88 in the same period the year before. However, Sprint does seem to have lost those high Average Revenue Per User (ARPU) customers that are key to profitability. The losses have affected Sprint’s owners – Japanese mobile phone network Softbank – to the tune of $879m, or 11 per cent of Softbank’s operating profit.

The Japanese firm bought Sprint last year for $22bn and was linked to a bid to buy T-Mobile US, but has since abandoned those plans due to regulatory pressure and has moved its focus to Asia.

Marcelo Claure, the new CEO at Sprint told journalists and analysts, “Clearly we have not turned the corner... While the company continues to face headwinds, we have begun the first phase of our plan and are encouraged with the early results. Every day we are focused on improving our standing with consumers, improving our network and controlling our costs.”

A weak financial position for a network at a time when there is a significant need for infrastructure investment bodes ill. Sprint has moved customers from the Nextel technology it bought through a merger and CDMA and now expects 2014 infrastructure expenditure to be “under $6bn”. It covers 260 million people with its 2.5GHz LTE network. ®

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