Sprint to shed as many as 1,100 jobs

Associated Press

OVERLAND PARK, Kan. — Sprint Corp. said yesterday it will eliminate up to 1,100 jobs, or 1.6 percent of its work force, because of increasing competitive pressure in the long-distance market.

The company has cut more than 22,000 jobs in the past two years. Of the latest job cuts, 850 are in the unit that provides service to businesses, with up to 250 others in jobs supporting that operation, including some in information technology.

Sprint Business Solutions President Howard Janzen said the cuts will be systemwide, with about half will be in the Kansas City area. Sprint, based in the Kansas City suburb of Overland Park, employs about 70,000, including about 20,000 in the Kansas City area.

Those whose jobs are being cut will be notified by mid-July, Sprint said.

The announcement said the company also would make organizational changes to improve efficiency.

"We have continued to look for ways to improve the business, cut overlaps, and move as close to the customer as possible," Janzen said.

Since the beginning of the year, Sprint has offered business customers a package that includes long-distance, wireless and local services.

"There's been good acceptance from business customers, but when you look at those segments, the long-distance piece is undergoing very strong pricing pressure because of the competitive nature of the business," he said. "Part of this change is responding to that pressure."

AT&T said three months ago that it would not lose long-distance business over price, and MCI responded with a similarly aggressive approach, said Jeffrey Kagan, an independent analyst from Atlanta who follows the telecom industry.

Janzen said long-distance revenue from business customers was down by 4 percent in the first quarter, compared with a 9 percent drop for AT&T and 17 percent for MCI.

"We are certainly doing a better job than the competition, but it is still a decline and that is one of the things we are responding to, to be sure we can continue to drive costs down and remain competitive," he said.

Now that the regional Bell operating companies, such as Verizon Communications Inc., can provide long-distance service in every state, the field has become increasingly competitive, Janzen said.

Although Kagan believes telecom companies will continue to make money for years selling long-distance service, he said growth in the industry will be in broadband and wireless.

Sprint, he said, is positioning itself to be a dominant player in both.

"The upside is that there are big growth opportunities for these companies," Kagan said. "It's just that it's not happening at the same time."

Shares of Sprint fell 45 cents to close at $17.42 yesterday on the New York Stock Exchange.