Sprint Nextel Corp is starting the process of eliminating up to 2,500 jobs in the current quarter in an effort to save at least $350 million annually, the company said on Monday.

Sprint, which has about 42,000 workers, expects a $60 million to $80 million charge this quarter for severance payments and other costs related to the latest round of layoffs, which follows 8,000 job cuts already this year.

One analyst said the savings would not make a big difference for Sprint, which would still have high costs.

Financially it helps, said Stifel Nicolaus analyst Christopher King, but he added: $350 million in annual expense savings isn't much for a company that has roughly $26 billion in annual operational expenses.

On October 29 Sprint reported posted a loss of $478 million, or 17 cents a share.

The No. 3 U.S. mobile service said many of the job cuts would happen by the end of December and would include jobs across the entire company, including layoffs in its wholesale unit as well as a reduction in contractor jobs.

Last week, Sprint, which has been working on stemming customer losses in its mobile business, said it was planning dozens of layoffs in its wholesale business due to a lack of growth in its landline business.

Sprint shares closed up 58 cents, or 20 percent, at $3.43 on New York Stock Exchange after the news.

(Reporting by Sinead Carew; editing by Carol Bishopric and Andre Grenon)