OVERLAND PARK, Kan. -- Sprint Corp., the telecommunications giant, said yesterday it will cut 700 jobs in its business solutions division as it stops selling business long distance services outside of package deals. The cuts represent 7.8 percent of the division's workforce.
The Overland Park company also said it will record a pretax charge against earnings in its third quarter to reflect a decline in value of its long distance assets.
The company said a majority of the job cuts will come from sales and support. The business solutions division was reduced by 1,100 jobs this summer; Sprint has cut 22,000 jobs in the last two years as it continues to evolve from primarily a local and long distance business to a company that earns more than half of its revenue from its wireless products.
The company is following other telecommunications providers that are recasting themselves as wireless and Internet services reshape the traditional telephone market.
This month, AT&T Corp. cut the value of its assets by one-quarter, or $11.4 billion, to reflect the reduced value of its network now that it will be carrying less consumer voice traffic. It will be charged against earnings in the third quarter.
Sprint officials said they would disclose the amount of the impairment charge when the company releases its quarterly results Tuesday.
Sprint, with 70,000 employees companywide, said it is cutting back on selling stand-alone products in highly competitive markets like long distance in favor of bundled offerings of long distance, local service, and wireless.
"The marketplace has changed dramatically, and it is important that we seize the opportunities that our unique portfolio of wireless and wireline assets allows us to offer," said Howard Janzen, president of Sprint Business Solutions, which currently has 9,000 employees. Spokesman Nick Sweers said Sprint is still determining where the cuts will come, but said half the jobs will be cut by year-end with the rest coming in the first half of 2005.
Sprint also said yesterday its third-quarter earnings before the asset writedown and other one-time items will beat Wall Street's estimate of 21 cents per share.
Sprint's shares rose 38 cents to close at $20.68.