Sprint job cuts to total 8,000

The telecom company plans to reduce costs by approximately $1.2 billion.

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By Julianne Pepitone, CNNMoney.com contributing writer

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Costs associated with the reduction could exceed $300 million in the first quarter of 2009, the company said.
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NEW YORK (CNNMoney.com) -- Sprint Nextel Corp. will cut a total of about 8,000 jobs by March 31, the company said Monday.

The plan is to reduce internal and external labor costs by about $1.2 billion on an annual basis, Sprint Nextel (S, Fortune 500) said in a press release.

The cuts will affect all levels of the company and various geographic locations, said telecommunications company, which currently employs about 60,000 people.

"Labor reductions are always the most difficult action to take, but many companies are finding it necessary in this environment," said Sprint CEO Dan Hesse.

Sprint, the third-largest wireless provider in the country, repaid $2 billion in debt in the second half of 2008. The Overland Park, Kan.-based company has struggled against its more healthy rivals,AT&T (T, Fortune 500) and Verizon Communications (VZ, Fortune 500).

The job reduction total includes about 850 positions that the company said it expected would be eliminated under a voluntary separation plan started in late 2008.

Severance and related costs associated with the reduction could result in a charge of more than $300 million in the first quarter of 2009, the release said.

Sprint said the company is also suspending its 401(k) match for the year, extending a freeze on salary increases and suspending its tuition reimbursement program.

The company will release its fourth-quarter 2008 financial results on Feb. 19, earlier than previously announced.

Shares closed the day up 3 cents, or 1.22%, to $2.49.  To top of page

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