Layoffs At Sprint PCS, RIMM

Communications Today, Nov 15, 2002

Sprint's wireless unit, Sprint PCS [PCS], cut its third-quarter loss to $7 million compared to $288 million, but the parent company wants "to create a more competitive cost structure" and will layoff 1,600 employees and 500 contractors from the unit. Overland Park, Kan.-based Sprint PCS said it is revamping its organization, cutting out layers of management and reprioritizing products and services to reduce costs. The severance-related costs associated with the layoffs are expected to create a $31 million pre-tax charge in the fourth quarter. The carrier said it expects the layoffs and other cost-cutting actions to result in annualized cash cost savings of $170 million. In light trading Thursday, Sprint PCS shares closed up 3.33 percent at $4.35 from a previous close of $4.21.

While Sprint PCS is trimming 6 percent of its staff, wireless data service and technology provider Research In Motion [RIMM] is cutting 10 percent of its staff with 2,200 layoffs. Waterloo, Ontario-based Research In Motion will take a charge of $8 million to $9 million in its third quarter, which ends this month, but expects the cost-cutting measures to save $20 million to $25 million a year. It expects to see savings from the firings in the fiscal fourth quarter, with the full savings impact Research In Motion lost $14.3 million, or 18 cents a share, in its second quarter (June-August). In heavy trading Thursday, the company's shares were up 5.79 percent to $14.81 from a previous close of $14.

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