Over 1,400 Jobs to Go Across Latin America As NII Holdings Cuts Costs

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Latin American operator NII Holdings (Nextel) has announced over 1 400 job losses as the company attempts to cut costs.

Over a quarter of the company' Group head office staff are to go on top the job losses at the networks.

The Company expects to incur cash costs related to employee severance in the range of $25 million to $35 million in connection with the plan, which include $8.6 million in charges related to restructuring activities at the Company's Mexico operating subsidiary that were accounted for in the Company's third quarter 2013 results. Most of the remaining costs are expected to be accounted for in the Company's results for the fourth quarter of 2013. The Company expects to realize annualized cost savings of $50 million to $55 million as a result of these actions.

Separately, the Company has modified its customer deactivation policy for inactive prepaid subscribers. As a result, the Company expects a higher level of prepaid subscriber deactivations in Mexico than previously estimated. Taking this adjustment into account, the Company expects a net subscriber loss of approximately 400,000 subscribers in Mexico for the fourth quarter 2013. This policy change is not expected to have an impact on net subscriber additions in Brazil or other markets.

"The structural changes we are announcing today support our accelerated growth strategy," said Steve Shindler, NII Holdings chief executive officer. "By realigning our business and refocusing our teams on our growth goals, we can further simplify and streamline operations, reduce costs and free up resources."

Other initiatives that are underway include the deployment of aggressive marketing campaigns in the Company's core markets that target growth on its new 3G networks, investments to expand the coverage and capacity of its 3G networks in Mexico and Brazil, and expansion of its device portfolio to include a wider range of smartphones and other handsets.

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