Sprint is preparing to cut about $2.5 billion in costs over the next six-month as part of the company’s five-point strategy to turn the company around. The Wall Street Journal announced that in a memo to staff this week, Sprint’s new chief financial officer said the company needed to cut between $2 billion and $2.5 billion in costs and announced an external hiring freeze. The cuts “inevitably will result in job reductions,” Tarek Robbiati, Sprint’s chief financial officer, wrote in the memo, which was reviewed by The Wall Street Journal. Robbiati advised that when employees request to spend money, try to treat every dollar as if it were their own.
Amir Rozwadowski of Barclays noted that this “bold move” wasn’t much of a surprise but rather confirmation of management’s prior commentary expressed during its most recent earnings call – notably, to deliver as much or more than the $1.5 billion in cost cuts achieved in FY15 during this fiscal year. The analyst explained that this $2.5 billion is likely to be a miss of gross operating and gross capex savings. According to The Wall Street Journal, cutting $2.5 billion in costs is an ambitious target. The company had $7.5 billion in operating expenses during the three months ended June 30. The company has said previously it cut $1.5 billion in expenses in the last 12 months (WSJ).
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