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Sprint Slashes 8,000 Jobs

Sprint Corp. (NYSE: S) is the latest U.S. telecom company to succumb to the economic downturn as it announced today plans to cut 8,000 jobs in the first quarter of this year. (See Sprint Slashing 8K Jobs.)

Sprint said the job cuts would reduce its annual internal and external labor costs by about $1.2 billion.

The operator didn't specify which positions or locations would be most affected, but said in a press statement issued Monday morning that the cuts would hit "all levels of the company" and that the geographic locations would vary.

However, Sprint noted that, due to the success of its recent efforts to improve customer satisfaction, headcount reductions in customer service functions will be minimized, leaving the company's "non-customer facing groups" to take the brunt of the cuts. (See Sprint Loses More Customers in Q3.)

Most of the 8,000 positions are expected to be eliminated by March 31. Included in that number are about 850 positions that Sprint expects to lose through a voluntary redundancy program started last year.

In addition to the workforce reduction in the first quarter, Sprint will stop contributions to employees' pension plans in 2009. In addition, a salary freeze implemented last year will remain in force in 2009. The operator also said it would halt a tuition reimbursement scheme in 2009.

Sprint isn't the only U.S. telecom firm to cut employee pension benefits. Last month, Motorola Inc. (NYSE: MOT) announced a similar halt to pension contributions as well as a salary freeze. (See Moto Freezes Benefits, Salaries and Moto Will Lay Off 4,000 More.)

Sprint will take a charge of more than $300 million in the first quarter for severance and other costs associated with the layoffs. The operator will report fourth-quarter 2008 results on February 19.

— Michelle Donegan, European Editor, Unstrung

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