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Report: Sprint to cut thousands more jobs

The nation's third-largest wireless carrier plans to cut thousands of jobs in an attempt to reassure investors that new CEO Dan Hesse is serious about streamlining the company's operations.
/ Source: The Associated Press

Sprint Nextel Corp., the nation's third-largest wireless carrier, plans to cut thousands of jobs in an attempt to reassure investors that new Chief Executive Officer Dan Hesse is serious about streamlining the company's operations, The Wall Street Journal reported Monday.

Citing unidentified people familiar with the matter, the Journal said the cuts would run into the thousands of workers. The Reston-based company, with operational headquarters in Overland Park, Kan., laid off 5,000 employees last year to end up at around 60,000.

A Sprint spokeswoman declined to comment on the report.

The wireless carrier has struggled in the past year, falling far behind wireless rivals AT&T Inc. and Verizon Wireless in attracting new subscribers and wrestling with customer service problems and sometimes ineffective marketing.

The downturn cost former CEO Gary Forsee his job. Hesse, former CEO of local telephone company and Sprint spin-off Embarq Corp., is facing a long list of potential changes at the company, and cutting employee costs could be one of them.

Hesse has shown a stomach for employee reductions. While at Embarq, he cut staff by more than 1,200.

Besides a layoff, Hesse and his staff are considering a plan to consolidate the company's operations at its Overland Park base, the Journal reported, adding that a final decision hasn't been made.

The Reston headquarters, a remnant of the Sprint's 2005 purchase of Nextel Communications Inc., holds 4,500 workers and has served as a reminder of the company's internal divisions between former Sprint and Nextel employees. An additional 13,000 employees are based in Kansas.

The Journal said that while Virginia-based employees are worried about a relocation, a person familiar with the situation said a move would likely affect only a few hundred top managers and executives.

Hesse also is faced with rethinking the company's marketing effort and whether to continue its plan to roll out a wireless broadband network, called Xohm, using WiMax technology. While Forsee proposed WiMax as a competitive edge for the company, investors and some analysts have been less receptive, worried about its experimental nature, its cost and the lack of short-term profits.