Troubled Sprint to Cut Jobs, Close Stores

NEW YORK — Sprint Nextel Corp. said Friday it is cutting about 4,000 jobs and closing 125 stores to reduce costs, moves that come as the troubled No. 3 wireless carrier faces slowing growth and subscriber defections.

Sprint, which ranks behind AT&T Wireless and Verizon Wireless, expects the cuts will save up to $800 million a year in labor costs by the end of 2008.

The store closings represent nearly 8 percent of Sprint's 1,400 retail locations.

Sprint will also close 4,000 of its third-party sales sites, such as stalls in malls and electronics stores.

Sprint has struggled with a lower stock price and fewer new customers compared to its rivals in the last year, said Jeff Kagan, an independent telecommunications analyst based in Atlanta.

"Cutting workers is always tough, but it may be part of what Sprint needs," Kagan said. "They have to improve customer care and improve their position in a very competitive marketplace, as well as cutting costs."

"I think we will see more of these kinds of moves in the near future," he said.

Reston, Va.-based Sprint had 53.8 million subscribers at the end of 2007. The company said it will issue its fourth-quarter earnings report on Feb. 28.

The job cuts will include both management and non-management employees throughout the company and should be completed in the first half of this year, Sprint said. The company will offer a voluntary separation plan for its workers.

After many troubled months, Sprint in December replaced Chief Executive Gary Forsee with Dan Hesse, former CEO of Embarq Corp., a local phone company and Sprint spin-off.

Many of Sprint's woes began when it acquired Nextel Communications Inc. in 2005, a merger that left the company struggling to reconcile incompatible networks.

The company also faces problems because of many Sprint poor-credit customers who now may be having trouble paying their bills.

The latest move casts further doubt on Sprint's plans to deploy Xohm, a new wireless service using WiMax technology that offers speeds similar to cable modems or digital subscriber lines. A commercial launch in some cities is planned for this year.

Sprint's mobile version of WiMax would allow access at home or while in motion across a metropolitan area, even on a highway.

While tests of the service are under way in Washington, Chicago and Baltimore, investors and other critics have called it too expensive and experimental.

On the Web:

Sprint: www.sprint.com