More Job Cuts at Sprint Nextel Expected Next Year

US operator, Sprint Nextel is expected to announce a large round of job cuts in the new year as the company tries to turn itself around. Pali Research analyst Walter Piecyk wrote on his blog that the company would post a charge to its finances in Q1 to cover the cost of the redundancies, but will boost the long term profitability of the firm.

Piecyk said that his views are in part based on recent conversations with Sprint CFO, Bob Brust. He also wrote that he expects CEO Dan Hesse to be far more aggressive in boosting subscriber growth - which could lead to a price war in the market.

In addition to a restructuring, Piecyk believes that cost reductions in customer care and in other parts of the organization will accelerate in 2009 and could amount to billions not millions of annualized cost savings.

A worry for the infrastructure suppliers is an expected reduction in network CAPEX to below US$2 billion during 2009. In the first nine months of this year alone, CAPEX amounted to US$2.5 billion - with a total spend of US$6.5 in 2007.

Posted to the site on 8th December 2008