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Faced with severe losses, Sprint has decided to slash 2,000 jobs after reporting a $765 million quarterly loss.
Earlier, this year, the number three US wireless carrier, Sprint replaced its chief executive after a failed bid for rival T-Mobile, also reported losing a large number of its most lucrative customer, amid price wars in the wireless sector.
Chief executive Marcelo Claure said Sprint termed the retrenchment as ways to adapting to the shifting industry landscape.
Claure said in a statement said, they have started a transformational journey for imporving network and controlling the costs.
The company has been forced to cut some of its monthly mobile plans to keep up with T-Mobile and others in the sector. Moreover, it has reported a net loss in the quarter of 272,000 postpaid customers, generally the most lucrative.
That was offset in part by a gain of 35,000 ‘prepaid’ customers who generally pay lower fees, and 827,000 wholesale customers.
The company faced challenges related to competitive positioning and adverse impacts to the customer experience resulting from its comprehensive network upgrade efforts over the last several quarters. As a result, the company has incurred losses of postpaid phone customers that are pressuring revenue trends.
To overcome the challenges, the company has initiated its transformation plan. The plan includes ‘a comprehensive review of all expenses to optimize its cost structure,’ aimed at trimming $1.5 billion in costs, and a reduction in the workforce of 2,000 positions.
Sprint said overall revenues grew nearly 10% from a year ago to $8.5 billion.
The company shares slid 4.2% to $5.91 in after-hours trade. Last year, Japan’s SoftBank took a controlling stake in Sprint, aiming to create a stronger number three rival behind Verizon and AT&T in the US market.
The deal is the largest overseas acquisition ever by a Japanese firm. Sprint stockholders kept a 22% stake in the firm.