AP NEWS
Related topics

Sprint to Cut 1,100 Employees

July 12, 2002

%mlink(STRY:; PHOTO:; AUDIO:%)

OVERLAND PARK, Kan. (AP) _ Sprint Corp. said Friday it will cut 1,100 employees and eliminate another 100 unfilled positions in the nation’s third largest long-distance company’s latest effort to cut costs.

The cuts will come from the Overland Park, Kan.-based company’s global markets division, which includes most of Sprint’s struggling long-distance business.

In some cities, Sprint also will eliminate its digital subscriber line, or DSL, platform, which allows high-speed Internet connections, Sprint spokesman Nicholas Sweers said. He said Sprint also plans to combine its different Web-hosting services to trim costs.

The company, which employs 80,000 people, did not say where the jobs would be cut. The cuts, which will occur through layoffs and normal attrition, are expected to occur over the next several weeks.

``We’re still determining which employees will be impacted and which locations those will be,″ Sprint spokesman Mark Bonavia said.

Dallas, Atlanta, Reston, Va., and the Kansas City area have the largest concentrations of global markets employees, Bonavia said.

In some cities, Sprint also will eliminate its digital subscriber line, or DSL, platform, which allows high-speed Internet connections, Sprint spokesman Nicholas Sweers said. He said Sprint also plans to combine its different Web-hosting services to trim costs.

``We are making significant steps that will enhance our focus on meeting financial commitments and position us to meet marketplace demands for 2003 and beyond,″ Len Lauer, president of Sprint’s global markets group, said in a news release.

Since eliminating 7,500 jobs last October and 3,000 more in February, Sprint has made layoffs a few dozen to a few hundred at a time. But employees have said the constant layoffs are hurting morale.

Like others in the industry, Sprint has struggled to cut costs to boost earnings and compete more effectively with the bigger long-distance operators AT&T and MCI.

The global markets group reported a $75 million operating loss in the first quarter. Its expects to report second-quarter earnings on Thursday.

``Sprint hasn’t announced as many job cuts as others in the space, so I guess it was due,″ said Jeffrey Kagan, an independent telecommunications analyst based in Atlanta. ``It’s another sign that the telecom rebound is not here yet.″

On June 7, Moody’s slashed Sprint’s debt ratings to near-junk status. Moody’s cut its rating on Sprint’s senior unsecured long-term debt from Baa3 to Baa2, one notch above junk status, and cut Sprint’s short-term debt to Prime-3 from Prime-2.

Moody’s attributed the downgrade, which affected about $22 billion of debt, to cash-flow concerns about Sprint.

Buffeted by industry competition and the general economic slowdown, Sprint has seen its stock prices decline from the $60 per share it reached when a planned merger with WorldCom Inc. was first announced in October 1999. Federal and European regulators eventually blocked the $129 billion deal.

Since revelations that WorldCom, owner of MCI, disguised $3.8 billion in expenses, Sprint has tried to assure investors about its accounting practices. But analysts have said Sprint could benefit from WorldCom’s woes if large long-distance customers defect to other providers.

Shares of Sprint FON were up 28 cents to $11.58 in late trading on the New York Stock Exchange.

___

On the Net:

Sprint: http://www.sprint.com/

AP RADIO
Update hourly