By Cecilia Kang
Washington Post Staff Writer
Friday, January 25, 2008

In its latest move to restructure and shore up its stock, Sprint Nextel yesterday announced the immediate departures of three top executives, including Chief Financial Officer Paul Saleh.

The troubled wireless carrier said that in addition to Saleh, Tim Kelly, chief marketing officer, and Mark Angelino, president of sales and distribution, had left. The three executives will be temporarily replaced from within the firm until permanent replacements are found.

"Permanent leaders will be named in conjunction with a review of overall strategy and an effort to streamline operations," chief executive Daniel Hesse said in a news release. "I have no predetermined timeframe in filling these positions but plan to act as quickly as possible."

The company's stock climbed on the news, gaining 37 cents to $9.09 a share.

The departure announcement was Hesse's second major move since taking the helm last month at Sprint, which has lost 1 million subscribers in the past year as customer service complaints increased, and has posted disappointing financial results. Last week, Sprint announced it would lay off 4,000 employees and close 125 retail stores -- changes it said would save between $700 million and $800 million a year. The company did not say how many of the layoffs will come from its headquarters in Reston.

Until Sprint finds permanent replacements for the departing executives, William Arendt, currently the company's controller, will serve as chief financial officer. John Garcia, senior vice president of product development and management, will be acting chief marketing officer; and Paget Alves, the regional president for sales and distribution, will serve as acting president of all sales and distribution.

Hesse, a telecom veteran who previously led Embarq, Sprint's local-phone spinoff, said in the release that he would look for new executives from inside and outside the firm. Some analysts said the company needs new people not connected to Sprint's strategy under Gary Forsee, who resigned as chief executive in October under shareholder and board pressure. Saleh served as interim chief executive for two months after the departure of Forsee, who had led the merger between Sprint and Nextel two years ago. "The management team had very little credibility, and investors really want for them to start fresh and bring outsiders," said Gray Powell, an analyst at Wachovia Capital Markets.

Powell said Sprint suffers from a lackluster brand that is losing subscribers to AT&T and Verizon, the top two wireless companies. Its sales channels are also confusing, he said, with Sprint retail stores competing with Radio Shack stores selling Sprint products in the same small markets, for example.

"AT&T is known for the best handsets. Verizon is known for its fast network. T-Mobile is known for its value. Sprint isn't known for anything," he said.

When Hesse came in as chief executive, he promised sweeping changes to streamline operations and said he would reevaluate investments in new technologies such as the $5 billion WiMax high-speed wireless network, an expensive project some analysts said would take too many years to make money and solve Sprint's current financial problems.

Hesse also said he would consider consolidating Sprint's two corporate campuses and moving the headquarters back to Overland Park, Kan., a suburb of Kansas City, where it was before the merger. About 4,500 employees and executives work in Reston and 13,000 employees work in Overland Park. Though the company hasn't said where its 4,000 job cuts will fall, analyst Patrick Comack of Zachary Investment Research said he expects the job losses to be at the Reston campus, which would fold soon after.

"The low-hanging fruit for Hesse is to straighten out the campus situation, which Forsee should have done years ago and was part of his incompetence," Comack said.