Sprint Corporation (NYSE:S) submitted a filing with the Securities and Exchange Commission (SEC) indicating its decision to cut jobs as part of its efforts to reduce costs and meet the changing dynamics of the marketplace.
According to the telecommunications company, it started implementing its workforce reduction plan last January 16 and expects to complete it by June 30.
Sprint Corporation (NYSE:S) said the plan includes several steps to improve operational efficiencies and reduce costs. The company expects to record approximately $165 million charges related to the job cuts in the fourth quarter of 2013.
The estimated charges represent severance and other related costs, which were calculated based on the existing employee benefit severance plan and information available as the time of the submission of its regulatory filing (Form 8-K). Sprint Corporation (NYSE:S) did not mention how many jobs will be eliminated.
Sprint previously announced 800 job cuts
Last August, Sprint Corporation (NYSE:S) announced that it will terminate 800 jobs from its customer support operations, but did not indicate a company-wide workforce reduction.
Stock rating downgraded due to limited upside
Early this month, Colby Synesael, an analyst at Cowen & Co downgraded his rating for the shares of Sprint Corporation (NYSE:S) to Market Perform citing that the stock has limited upside even if its parent company, Softbank Corp (OTCMKTS:SFTBF) (TYO:9984) succeeds in its bid to acquire T-Mobile US Inc (NYSE:TMUS).
The analysts suggested that Sprint Corporation (NYSE:S) would face another bidding war with Dish Network Corp (NASDAQ:DISH) to acquire T-Mobile US Inc (NYSE:TMUS). He added that the proposed merger would be slightly negative given the potential regulatory/integration risk.
Sprint Framily Plan
Sprint Corporation (NYSE:S) recently launched its new pricing program dubbed Sprint Framily Plan to boost its sales. Under the program, its subscribers can invite their friends to switch to Sprint and join their Framily to lower their monthly bills.
“We recognize that often friends are considered to be as important as family. What better way to ensure you can stay connected than through the Sprint Framily Plan. It allows you to share wireless savings with the group you care about the most,” said Jeff Hallock, chief marketing officer of Sprint Corporation (NYSE;S).