Sprint CFO: Budget Cuts 'Inevitably Will Result in Job Reductions'Sprint CFO: Budget Cuts 'Inevitably Will Result in Job Reductions'
Sprint (S) Chief Financial Officer Tarek Robbiati said his company plans to cut between $2 billion and $2.5 billion in costs. In addition, Robbiati noted that Sprint has implemented an external hiring freeze. Here's everything you need to know.
October 8, 2015
Sprint (S) Chief Financial Officer Tarek Robbiati said his company plans to cut between $2 billion and $2.5 billion in costs.
The news comes after the telecommunications giant last month announced plans to sit out on the U.S. government’s wireless airwaves auction in March.
Robbiati also pointed out that the budget cuts “inevitably will result in job reductions,” according to The Wall Street Journal.
“I realize this may be very unsettling and that you have been hearing similar messages for years,” Robbiati wrote in a memo to Sprint employees. “But it has never been as critical as it is now. Without achieving a low cost structure, we can’t invest in other areas, such as our network, that are critical to our long-term success.”
In addition, Sprint has implemented an external hiring freeze, and the company’s finance department must now review and approve all expenditures.
Sprint recorded $8 billion in net operating revenues in the first fiscal quarter of 2015, which represented a 9 percent year-over-year decrease.
However, Sprint has raised its fiscal outlook for 2015, citing “improved customer trends, a greater reduction in operating expenses and a higher mix of sales on device and financing options.”
“Going forward, we are confident in our plan to leverage our unique spectrum assets to make our network a competitive advantage, aggressively reduce operating costs and utilize our business relationships and assets to fund our turnaround,” Sprint CEO Marcelo Claure said in a prepared statement.
Sprint is the third-largest cell carrier in the United States and had approximately 56.8 million subscribers as of the end of June, The Washington Post reported.
T-Mobile (TMUS) recently pulled ahead of Sprint to become the second-largest cell carrier; the company said it had 58.9 million subscribers as of July.
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