Sprint Begins 'Transformational Journey' By Announcing 2,000 Job Cuts

Sprint is planning to reduce its workforce by approximately 2,000 employees, or 6.5 percent, a move the company says will save $400 million annually on labor costs. Unfortunately that is what is has come to for Sprint -- looking for ways to cut costs following a dismal quarter underscored by an operating loss of $192 million. Going forward, Sprint's goal is to reduce expenses by $1.5 billion annually.

"We have started a transformational journey," said Marcelo Claure, who was appointed CEO of Sprint in mid-August. "While the company continues to face headwinds, we have begun the first phase of our plan and are encouraged with the early results. Every day we are focused on improving our standing with consumers, improving our network and controlling our costs."

Sprint Store
Image Source: Flickr (Mike Mozart)

Amid fierce competition in the mobile space, Sprint lost 272,000 monthly subscribers during its second fiscal quarter of 2014, the 11th quarter in a row that it's seen subscribers flee the network. No doubt that many of those ended up at rival T-Mobile, which has been aggressively chasing subscribers through a variety of promotions, including an offer to pay off early termination fees from existing carriers.

Indeed, Sprint said it "faced challenges related to competitive positioning," though it also pointed the finger at adverse impacts to the customer experience resulting from network upgrade efforts over the past several quarters.

In response to the news, shares of Sprint have plummeted nearly 17 percent to $5.16 so far today, indicating that investors have little confidence in Sprint's turnaround plan.