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Archive for Wednesday, December 11, 2002

Sprint announces new round of layoffs

December 11, 2002

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Battered telecommunications company Sprint Corp. said Wednesday it will lay off 2,100 more workers during the next year as it tries to reorganize and return to profitability.

The Overland Park, Kan., company said it will combine network, information technology and billing operations for several of its divisions as a way to save up to $145 million a year.

Sprint PCS, until earlier this year, operated a customer call center in Lawrence that employed approximately 500 people. Some of those employees were laid off and some were transferred to the company's headquarters in Overland Park.

It's not immediately known how many of the latest layoffs affect Lawrence-area residents. A company spokeswoman said it would take some time to identify which specific employees would be laid off.

The layoffs are the latest in a series Sprint has made to try to stop losses. The telecommunications industry has been in a deep funk for several years.

During the third quarter, which ended Sept. 30, Sprint lost $68 million as heavy losses in its wireless division eclipsed gains in its local and long-distance sector. Sprint PCS lost $170 million during the quarter. Sprint FON, which includes the company's local and long-distance division, earned $102 million.

Last month, Sprint PCS, the company's wireless division, laid off about 1,600 workers, or six percent of the division's work force. About 660 of the jobs were in the Kansas City area. PCS also released about 500 contractors.

PCS President Len Lauer said at the time that the layoffs were part of the company's efforts to reorganize by getting rid of management and streamlining products and services to cut costs.

Sprint, the nation's third largest long-distance provider and fourth-largest wireless provider, has laid off more than 15,000 employees since Oct. 2001.

"The consolidations we are announcing today are a necessary step if we are to capitalize on our strength, which is the ability to offer a complete portfolio of wireline and wireless voice, data and Internet services under a single brand at a competitive price," said William T. Esrey, Sprint's chairman and chief executive officer.

The company said the reorganization's goal is to create one division to handle all local, long-distance, Internet and wireless network needs for its customers.

Sprint now has separate divisions for local telephone, wireless and other services.

Sprint FON was down 31 cents to $13.85 in early trading Wednesday on the New York Stock Exchange; Sprint PCS was down 1 cent to $5.04.

The 2,100 layoffs include about 1,000 job cuts that are a direct result of the consolidation; 600 will be in network services, 300 will be in information technology and 150 will be in billing and accounts receivable.

The other 1,100 job cuts are chiefly an effort to cut costs; 450 will be in local telephone operations; 300 will be in global markets and 200 will be from corporate center staff.

About half of the layoffs will be in Kansas City and the rest will be spread throughout the country, all over the course of the next year, said Bill White, a Sprint spokesman.

After the layoffs, the company expects to employ about 72,000 workers.

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