On Friday, Sprint announced that it was closing five of its PCS customer service centers throughout the nation, putting 3,000 people out of work. One of the centers is located in Lawrence and will affect 500 workers.

Sprint’s FON stock, which tracks most operations, including local and long-distance wireline service, dropped 50 cents to $13.30 Friday. PCS, which tracks Sprint’s wireless operations, closed Friday at $9.27, a drop of 93 cents.

A memo last week from Sprint chief executive William T. Esrey that mentioned “eliminating redundancies” has fueled rumors of further cuts. Sprint officials have consistently declined to discuss the layoff rumors.

In the e-mail memo to the company’s 82,000 employees, Esrey said he was frustrated by the downturn in the telecom market.

“The market is painting the entire industry with a broad, negative brush,” Esrey said in the e-mail.

Sprint is part of the downturn, in part because of a dismal financial year in 2001. The company wrote off $1.8 billion after ending its Sprint ION project. And Sprint’s FON and PCS divisions last week reported a combined net loss of $1.4 billion on sales of $26.07 billion in 2001, compared with net income of $93 million on sales of $23.61 billion in 2000.

As Esrey noted, Sprint is not the telecom industry’s only Wall Street struggler. The entire industry has suffered declining revenues and plunging stock prices.

Southwestern Bell Telephone Co.’s parent, SBC Communications Inc., saw revenues in the fourth quarter decline 0.3 percent, compared with growth of 9.6 percent in the fourth quarter of 2000.

Meanwhile, regional Bell company Verizon’s growth was 1 percent in the last quarter of 2001, compared with 6.7 percent growth a year earlier.

Other types of telecom companies, including long-distance companies, local Bell competitors, and companies drowning in the flooded fiberoptic market, have been slumping for two years.

Global Crossing, a fiberoptic telephone network builder, has filed for bankruptcy protection, and questions about its accounting practices threaten to cast a shadow across the industry.

Berge Ayvazian, a telecommunications analyst with the Yankee Group, said Sprint needs to change its perception in the market so it is no longer associated with companies such as WorldCom or Global Crossing.

“On the one hand, I think there’s a short-term phenomenon that’s almost impossible to avoid or resist,” Ayvazian said. “But I think the market is going to open up for telecom providers. In that context, Sprint has to look to Wall Street more like SBC or Verizon.”

Ayvazian said investors should recognize that Sprint is more like a regional Bell company than a long-distance carrier.

The company has a broad range of services and is moving to sell its local, long-distance and wireless services in bundled packages. For example, 45 percent of Sprint’s local customers are subscribing to the company’s long-distance service.

“They have many of the capabilities of the Bell companies, and assets without a lot of the regulatory restrictions,” Ayvazian said.

Financial and industry analysts suggest that the company could follow any of three courses as Wall Street pressure increases for Sprint to return to its high-dollar financial returns of years past: increase revenues, cut expenses, or hang on for the ride and hope for a market rebound.

Esrey gave some indication in his memo that the company may be doing a little of all three.

“In time, markets find equilibrium,” Esrey said. “Winners and losers in the marketplace are determined by the ability to execute and hit objectives, and, in the end, performance is rewarded. There is no magic bullet.”