Sprint reports $165 million in costs tied to layoffs
01/23/2014 7:03 PM
01/23/2014 7:03 PM
Layoffs at Sprint Corp. cost the company more than $165 million in severance and other expenses, according to a public filing Thursday.
Company executives last week said Sprint would eliminate an undetermined number of jobs during the first half of this year. The layoffs included 300 to 500 jobs provided by less profitable retail stores Sprint plans to close. Other cutbacks are expected in its customer care centers, business sales and other areas.
In a filing with the Securities and Exchange Commission, the Overland Park-based company said severance payments and other related costs would total $165 million for the company’s fourth quarter of 2013, which ended Dec. 31.
The filing said “additional material charges” from the cutbacks would be recorded in this year’s quarterly reports. It could not yet determine the extent of those costs.
Sprint plans to report its fourth quarter results on Feb. 11. It recorded a $383 million profit in the third quarter, its first quarterly profit since 2007.
The company has said the layoffs are not related to SoftBank Corp.’s purchase of an 80 percent controlling stake in Sprint last year.
Analyst Jennifer Fritzsche, with Wells Fargo Securities, said the cutbacks probably reflect a “somewhat inflated” cost structure left over from Sprint’s 2005 merger with Nextel Communications.
“While the human element of such moves is indeed difficult, we believe this reduction was likely overdue and needed,” she said in a note to clients. “We continue to believe Sprint/SoftBank is making many under-the-radar moves to improve its overall cost structure.”
Last Friday, Sprint officials said most of the layoffs were related to changes in the marketplace, improved operations at the company and fewer customer questions at its call centers.
Employees in areas that will see layoffs were notified of the coming cutbacks last Friday. Job losses will come among management and non-management positions, the company said.