Sprint cuts 8,000 jobs, 15% of its workforce

Sprint Nextel announced 8,000 job cuts Monday and other cost-saving measures that CEO Dan Hesse told employees in an internal memo kept the company from having to cut 3,000 additional jobs.

Hesse was not available for comment but a copy of the memo was provided to USA TODAY.

Sprint's decision to cut 15% of its workforce is the latest in a series of moves aimed at turning around the ailing wireless carrier. Sprint (S) has been losing customers by the thousands, and the bleeding continues. The cuts will save $1.2 billion annually, the company says.

Drawing a bead on downsizings at other big companies, including AT&T, Motorola and Microsoft, Hesse said it was critical for Sprint to also make reductions "to ensure our company has the financial resources to weather this economic storm."

A former AT&T executive, Hesse became Sprint CEO in late 2007. Since then, he's been slashing costs, improving customer service and introducing products to woo customers. Roger Entner, chief of telecom research at Nielsen, says the cuts suggest that Sprint's problems are far from over. "The supertanker known as Sprint is taking on more water."

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Despite major improvements of Sprint's two cellphone networks, many consumers still regard Sprint's service as substandard. Changing that perception will be tough, Entner says. "It takes about a year of positive buzz to turn things around."

"The earliest they could turn the corner would be the end of this year," he predicts.

Rumors of a Sprint acquisition have been swirling for months, in part because the shares are so cheap. They closed at $2.49 Monday. Jane Zweig, CEO of The Shosteck Group, a market analysis group that tracks wireless, doesn't think that's likely. "Who'd want them?"

Entner says the economic downturn is probably the biggest deterrent to a Sprint acquisition. "Nobody can get the credit to buy them," he says. "If this was 2007," when merger money was flowing, "somebody would have bought them by now."

As part of its cost cutting, Sprint will freeze salaries and suspend matching contributions for its 401(k) — actions that saved the company from 3,000 more job cuts. The pay freeze also applies to Hesse, says Sprint spokeswoman Leigh Horner.

Hesse and other employees may still be eligible for end-of-year bonuses. Bonus payout "depends on whether they met their (financial) objectives" for the year, Horner says.

Sprint lost more than 1 million subscribers in the third quarter and is expected to lose as many in the fourth quarter. Results for the fourth quarter are scheduled to be released on Feb. 19.

Source : USAToday
[tags : recession bankrupt collapse retrenchment financial news collapse stagnation economic slowdown financial collapse world recession global recession layoff job cut]

Ericsson to Cut 5,000 Jobs as Profit Falls

Telecommunications equipment maker Ericsson(ERIC Quote - Cramer on ERIC - Stock Picks) plans to cut 5,000 jobs as fourth-quarter earnings declined 31% to 3.9 billion kronor ($430.9 million) from 5.6 billion kronor a year earlier.

The Swedish company said Wednesday sales rose 23% to 67 billion kronor on "good demand" for the company's "portfolio and across the world." Ericsson said professional services have continued to show strong growth. But the company has been "affected by the economic downturn and the declining demand in the consumer market and has taken necessary actions."

Earnings also declined because of a "dramatic drop" in the contribution from its handset unit, Sony Ericsson. The joint venture with Japan's Sony(SNE Quote - Cramer on SNE - Stock Picks) last week swung to a fourth-quarter loss of 187 million euros ($243 million).

Ericsson said it has recorded fourth-quarter charges of 2.3 billion kronor and full-year charges of 6.7 billion kronor, resulting in cost savings of 6.5 billion kronor.

The company said it expects further restructuring charges in 2009 estimated at 6 billion to 7 billion kronor, with annual savings of 10 billion kronor expected by the second half of 2010.

Ericsson said it plans to reduce consultants and other temporary staff, and consolidate research and development sites. Of the 5,000 job cuts, 1,000 will be made in Sweden, primarily in Stockholm, the company said.

CEO Carl-Henric Svanberg warned that the financial downturn makes it "difficult to more precisely predict to what extent consumer telecom spending will be affected, and how operators will act."

Source : TheStreet
[tags : recession bankrupt collapse retrenchment financial news collapse stagnation economic slowdown financial collapse world recession global recession layoff job cut]

Nokia Siemens cuts 1,250 jobs in Finland, Germany

Nokia Siemens Networks Tuesday said it will lay off 1,250 employees in Finland and Germany as part of a previously announced cost-cutting plan.

The company said the job cuts will affect 750 employees in the Finish cities Espoo, Tampere and Oulu, as well as 500 staff at the Hofmannstrasse office in Munich, Germany.

The company, a joint venture between Nokia Corp. and Siemens AG, said the layoff notices were part of the planned 9,000 job cuts announced when the joint venture was formed in June, 2006.

It said it has so far reduced the number of employees by a total of 6,000.

Included in that was a job cut of 2,300 staff in Germany, which was concluded in May 2008. However, the company said new assessments of cost-cutting requirements and "continued challenging telecommunications market conditions" meant it had to continue the reduction now.

Nokia Siemens Networks also said it has reached an agreement to sell its manufacturing site in Durach, Germany to the current management of the plant, which will result in a transfer of around 500 employees.

Some 50 jobs in Egypt and 20 jobs in the United States will also be cut, and the company said other countries should also expect to see small staff reductions.

Source : IHT
[tags : recession bankrupt collapse retrenchment financial news collapse stagnation economic]

Nokia To Cut 600 employees

Nokia has warned that a series of company reorganisations could lead to around 600 employees losing their jobs.

The company said on Tuesday that it plans a number of moves within its markets and research centre units. Of the jobs which could be cut, roughly 235 are located in Nokia's home country of Finland.

Nokia said that the moves were more due to its ongoing restructure than any economic factors.

"Today's changes are part of Nokia's constant renewal where it is important to be close to our customers and ensure that our people are able to focus on the key business priorities," said Juha Äkräs, Nokia's senior vice president of human resources.

"Also, our aim is to find alternative work within Nokia for as many employees as possible."

Most of the cuts will come from sales and marketing activities in Nokia's markets unit. The firm said that some 450 employees could be affected by the cuts, 100 of whom are based in Finland.

Many of the remaining cuts will come from the Nokia Research Center, which will see as many as 130 employees affected, including 100 in Finland.

The remainder will be among the 35 roles that could be cut globally as Nokia shifts its global process operations unit. Nearly all of those moves are said to be occurring in Finland.

Nokia has already expressed gloom over the current economic climate and today's announcement comes in the midst of a wave of cuts in the consumer and enterprise technology markets.

Circuit City announced yesterday that it is to close 155 stores in the US, while Xerox and Yahoo announced thousands of job cuts in October.

Source : vnunet
[tags : recession bankrupt collapse retrenchment financial news collapse stagnation economic slowdown financial collapse world recession]