Sprint on Monday announced plans to cut an additional 2,000 jobs as it reported a net loss for the second quarter of its fiscal year.
The Overland Park, Kan.-based telecom company posted a net loss of $765 million, or 19 cents per share, for the quarter. That compared to a net loss of $699 million, or 18 cents per share, for the prior-year quarter. Analysts were expecting a loss of 11 cents per share with revenue of $8.66 billion. Revenues rose 9.5 percent, to $8.49 billion.
Sprint expects the job reductions to create savings of about $400 million a year, but the company has a long way to go to reach its goal of $1.5 billion in annualized cost reductions compared to 2014 spending levels.
Sprint, the third-largest wireless provider in the U.S., lost 272,000 phone subscribers in the quarter and saw half a million customers leave its network in total. The company blames the contract losses first on the shutdown of its aging Nextel network and, more recently, on a massive network overhaul that has resulted in more dropped calls in construction areas.
CEO Marcelo Claure, who replaced Dan Hesse as the Sprint’s chief executive midway through the quarter and was handling his first earnings call at the helm of the company, described Sprint’s current situation as the start of “a transformational journey.”
“While the company continues to face headwinds,” Claure said, “we have begun the first phase of our plan and are encouraged with the early results.”
After Sprint’s bid to acquire T-Mobile, the nation’s No. 4 wireless carrier, fell apart in early August, the company brought in Claure and has ushered in numerous changes.
Aiming to stem subscriber losses, Sprint in September unveiled promotions that offered customers more data. But its competitors have launched promotions of their own, and each has reported strong subscriber growth so far this quarter.
Sprint also targeted subscribers upgrading to Apple’s new iPhone 6, and the company has introduced a new business model: phone leasing. Analysts say the iPhone 6’s launch will have a bigger impact on next quarter’s earnings.