Sprint Layoffs 2014: 2,000 Employees to be Let Go

At least 2,000 employees of Sprint Corporation will have to find new jobs after the company decided to lay them off as part of their efforts to cut costs and reduce losses.

Reuters reported that the move is expected to reduce the company's labor costs by at least $400 million a year. Sprint is considered as the "third largest carrier" in the United States.

Aside from this big move, the company also announced that it will be downgrading its forecasts for the year. It earlier predicted that 2014 earnings will range from $6.7 billion to $6.9 billion. It now lowers expectations to $5.8 billion and $5.9 billion earnings for the year.

CNN Money said in a separate report that Sprint, in the most recent quarter, saw its bottom-line dwindling. Company losses for the recent quarter amounted to $192 million. The losses were primarily caused by the more than 270,000 contract subscribers the company lost. Sprint however chose to be more optimistic, calling it as "transitional."

New company CEO Marcelo Claure said in a statement that they have just "started a transformational journey."

"While the company continues to face headwinds, we have begun the first phase of our plan and are encouraged with the early results," CNN quoted Claure as saying.

Claure entered Sprint in August to lead the company's turnaround efforts, CNN noted. Claure is a former head of mobile phone distributor and service company Brightstar. The turnaround efforts came after the plans to merge with T-Mobile did not push through.

CNN said that if the merge continued, it would probably have equaled with the number of subscribers its rivals Verizon and AT&T have.

Claure told Reuters that he had earlier warned his workers about the layoff.

"My job as CEO is to make sure that all costs reflect the value that we are going to provide to the market. I said on day one to all my employees that we were going to take costs out and there will be layoffs," Claure was quoted by Reuters as saying.

He however said that no more job cuts are expected so far but he admitted that they are still finding for other ways to diminish company costs.

The company revealed that it aims to reduce annual expenses of $1.5 billion. Reuters said Sprint expects that the cuts made would counterbalance service revenue declines attributed to customers carrier switch.

Roger Entner, an analyst at Recon Analytics, said that there is really a need to reduce costs.

"He has to cut costs, that's the easiest away to show he is doing something overall...He needs to get aggressive with pricing to attract more customers, but most importantly he needs a better network," Entner was quoted by Reuters.

Claure told Reuters that "more changes" will be coming the way as time goes by. Meanwhile, Junichi Miyakawa has been named as the company's technical chief operating officer last Friday.

Reuters said that Sprint saw its third quarter operating losses contracted to $192 million from $398 million a year ago after revenues climbed to $8.5 billion from $7.7 billion.