Sprint Nextel to Cut 8,000 Jobs

Sprint Nextel Chief Executive Dan Hesse may be full of rosy optimism in those commercials, but it’s a little gloomier behind the scenes. The company announced today that it will lay off 8,000 employees, costing $300 million in severance payments and other expenses but ultimately saving $1.2 billion. For the remaining workforce, salaries have been frozen, 401(k) matching is suspended and tuition reimbursement is on hold.

From September 2007 to the same month last year, Sprint lost 3.5 million subscribers, leading some analysts like John Hodulik at UBS to predict the company’s doom. However, a new $50 per month plan for Sprint Nextel’s Boost pre-paid brand could bring in some fresh customers, especially in this economy. “Labor reductions are always the most difficult action to take, but many companies are finding it necessary in this environment,” Hesse said. “Our commitment to quality will not change.” [Associated Press]