Sprint Corporation continues to make several efforts towards significant cost cutting as the company reportedly hopes to cut its operating costs by $2.5 billion. This time, the company turns to severance pay in an effort to do so.
According to a report from the RCR Wirless News, Sprint Senior Vice President of Human Resources Sandy Price has recently sent out a letter across Sprint’s workforce that the company is looking cut its severance package in half. In the past, the company had usually given two weeks severance of full pay for each year of employment. This time, however, the company is only willing to offer one week of pay for each year an employee has worked with them, effectively cutting severance benefits by 50%. Moreover, Price has also reportedly said that Sprint shall also do away with the $1,000 additional separation lump sum payment it usually offers.
However, according to a The Kansas City Star, it is possible for some employees to still receive the original severance package from Sprint, provided they receive a notification sooner rather than later. Employees who are notified before February 1 are said to still be entitled to receive the high severance package, while those notified after January 30 will only be entitled to the reduced severance package. With regard to this, Sprint spokeswoman Melinda Tiemeyer has told The Kansas City Star, “There will be notifications before that date.”
Meanwhile, Tarek Robbiati, Sprint Chief Financial Officer, seems to have made it very clear that job reductions in the company are necessary in an internal memo distributed earlier this month. He had reportedly written that cutting costs in the company inevitably will result in job reductions.”
Sprint has been undertaking a lot of cost cutting initiatives continuously. These include going paperless, removing trash cans, prohibiting the use of a limousine with driver for the whole day and cutting as much as $500 million in equipment spending.
Earlier this year, Sprint Chief Executive Officer Marcelo Claure the company is looking to eliminate as much as 2,000 jobs. Last year, the company cut 1,700 jobs.