Sprint to Cut 4,000 Jobs, Close 8 Percent of Stores
Sprint shares fell 7 percent in pre-market trading from its close of $11.57 on Thursday on the New York Stock Exchange.
The company said it would cut 125 stores and eliminate more than 4,000 sales outlets within retailers. Sprint has about 20,000 total distribution points, including some 1,400 of its own retail stores.
Sprint expects the measures to trim labor costs by an annual rate of $700 million to $800 million by the end of 2008. It will record a first-quarter charge for severance costs.
Sprint has been losing ground to bigger rivals such as AT&T Inc amid network and customer service problems that drove away high-value post-paid customers who pay monthly bills.
Its has also been hurt by a U.S. credit crunch for subprime borrowers, also known as prepaid customers, who often pay for calls in advance so they do not have to commit to a long-term mobile phone contract.
The company said on Friday it saw a net gain of 500,000 subscribers through wholesale channels, growth of 256,000 Boost Unlimited users and net additions of 20,000 subscribers in its affiliate channels.
Sprint also reported net losses of 683,000 post-paid subscribers and 202,000 prepaid subscribers for the quarter. In total, Sprint's subscriber base was 53.8 million at the end of 2007, including 40.8 million post-paid and 4.1 million prepaid customers.
Sprint is due to release its fourth quarter results on Feb. 28.
(Reporting by Michele Gershberg; Editing by Derek Caney, Phil Berlowitz)
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