Sprint to Make Drastic Cuts to Survive

There’s no doubt that Sprint (NYSE: S) has been in a bad way, financially, for too long. With almost every recent quarterly report stained in red-ink, Sprint is in dire need of more revenue or lower costs, or both.

Sprint Nextel’s CFO Bob Brust spoke at the UBS annual media and communications conference today, making references to drastic job-cuts and “overshooting” Sprint’s cost-cutting goals. Sprint is seemingly dedicated to making significant cuts across the spending spectrum. Brust stated that “a company never went out of business because it took too many costs out. A company goes out of business because you didn’t take enough costs out. As you take costs out, you can always overshoot it. In fact, if we overshoot it, you know you did a good job because the pain is so loud, and you can always go back in and add something.” He continued to say that the cost-cutting measures would be “big.”

The plan to shave costs from Sprint’s bottom line will include re-assigning employees and firing others altogether. Since taking his position as CFO, Brust says he has reduced the costs associated with excessive and unnecessary printing and copying. Most recently, Mr. Brust put a hold on ordering new office supplies, stopped ordering bottled water, and has reined in the sales team’s spending. It’s clear that things are bad at Sprint, which may include making “Draconian cuts.”

The cuts will follow on Sprint’s attempt to thin out the ranks through their voluntary separation compensation, which offered compensation for qualifying employees that voluntarily resigned their positions.

A leaner, and hopefully meaner, Sprint Nextel will focus on retaining its subscriber base in 2009, and isn’t expecting to add new customers to its network until 2010. Sprint will concentrate on heavy advertising to increase its public image. And, to weather the current economic storm, Sprint will be keeping an average of $4 billion in cash reserves.

[Via: MocoNews]