Sprint to cut $2.5 Billion in costs and reduce workforce in savings drive

It’s no secret that in its attempt to increase its customer base, Sprint has been burning through its finances, and now it seems that its main backer, SoftBank, may well have tightened the purse strings. Today, the Wall Street Journal has reported that Sprint is set to undergo a round of layoffs and cost-cutting, just days after the carrier announced it didn’t need to participate in the upcoming 600MHz wireless spectrum auction. 

The report says that Sprint will attempt to cut around $2.5 billion in costs, an action that will almost certainly result in job losses, according to Sprint’s chief financial officer, Tarek Robbiati. An external hiring freeze was also announced, this means that any openings that appear will be filled internally by staff already employed by Sprint. The CFO went on to say that the finance department must review and approve all expenditures, and that:

“The main thing to consider when requesting to spend money is to take an owner’s mindset by treating every dollar as if it were your own.”

Sprint previously reported it had saved more than $1.5 billion in expenses in the previous 12 months, although the carrier’s operating expenses hit the $7.5 billion mark for the second quarter of 2015.

Sprint’s decision to refrain from participating in the 600MHz wireless spectrum auction has more than a hint of damned-if-I-do-damned-if-I-don’t  to it. While it could be argued that Sprint’s decision has limited its long-term ability to upgrade its networks, at the same time, Sprint just doesn’t have the financial muscle to out-spend At&T or Verizon. And that’s not even mentioning whatever T-Mobile has up its sleeve.

Today’s news of cost-cutting and layoffs seems to be a long way from the Sprint CEO’s bullish announcement back in May that he expected the carrier to be vying for the top 2 spot in 18-24 months. It isn’t quite so obvious that the patient is indeed in stable condition as he previously claimed.

Source: WSJ

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