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Sprint Nextel Confirms 4,000 Redundancies

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USA based Sprint Nextel has confirmed recent rumours and announced that it is to cut 4,000 jobs from its workforce. The company, which has about 60,000 employees, let 5,000 workers go last year. The company also expects to eliminate more than 4,000 third party distribution points and to close approximately 125 (8%) of its own retail locations. The company has around 20,000 total distribution points, including nearly 1,400 Sprint retail stores.

Sprint Nextel says that it expects its cutbacks to reduce its internal and external labor costs by an annualized rate of $700-$800 million by the end of 2008. The employee headcount reductions are expected to be completed in the first half of the year and will include management and non-management positions throughout the company.

For the fourth quarter Sprint Nextel reported a net gain of 500,000 subscribers through wholesale channels, growth of 256,000 Boost Unlimited users and net additions of 20,000 subscribers within affiliate channels. These gains were offset by net losses of 683,000 post-paid subscribers and 202,000 traditional pre-paid users.

In the fourth quarter, post-paid churn was 2.3 percent. Compared to the third quarter, improved voluntary churn in both the CDMA and iDEN customer bases was offset by higher involuntary churn. At the end of 2007, Sprint Nextel served a total subscriber base of 53.8 million subscribers including 40.8 million post-paid, 4.1 million traditional pre-paid, 500,000 Boost Unlimited, 7.7 million wholesale and 850,000 subscribers through affiliates.

Sprint Nextel currently expects to announce fourth-quarter and full-year 2007 results on Feb. 28th.

There was no comment on the rumoured plans to close its Virginia office campus and consolidate its operations at the Kansas City HQ.

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