Wireless phone company Sprint Nextel Corp. on Friday fell the most in 25 years in trading after announcing plans to cut 4,000 jobs and close 125 retail locations in a bid to manage slowing subscriber growth, profit and sales.
Shares of the third- biggest wireless carrier in the U.S fell as much as 30 percent, the most since July 1980. The company has been struggling to maintain market share against rivals AT&T Wireless and Verizon Wireless. Sprint said it lost around 683,000 contract customers last quarter, more than the 350,000 estimate of Stanford Group Co. analyst Michael Nelson.
The Reston, Virginia-based company fell $3.02, or 26.1 percent to $8.55 at 3:11 p.m. in New York Stock Exchange composite trading. Larger rivals AT&T and Verizon Communications Inc., the co-owner of Verizon Wireless, also each fell as much as 5 percent.
The job cuts, equal to about 6.7 percent of the workforce, will help save as much as $800 million a year, the company said. The job cuts should occur in the first half of the year and will apply to employees across the company, including management and non-management employees. The cuts are the first major moves by Dan Hesse, who became Sprint's CEO a month ago.
The company's struggle dates back to Sprint's 2005 acquisition of Nextel Communications Inc., which has left it with incompatible networks and technical problems.