Sprint Nextel to Cut 160 Jobs in Herndon
Consumer demand has softened for new cellphones and subscription plans.
(By Jin Lee -- Bloomberg News)
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Friday, January 9, 2009
Sprint Nextel said yesterday it will lay off 160 employees from its Herndon operations. The announcement comes amid frozen credit markets, economic turmoil and questions about the success of the company's high-speed Internet technology venture with Clearwire.
The layoffs will come from staff at Sprint's building that operates laboratories and offices for its former WiMax brand Xohm. Xohm merged with Clearwire of Kirkland, Wash., in November in a $12 billion deal that involved investments from Google, Intel and cable operators Comcast, Time Warner and Bright House. While most of the assets were transferred to Clearwire in the merger, Sprint retained employees and operations at its Xohm building.
Sprint said that after the merger, some employees were offered jobs at Sprint and some at Clearwire; the layoffs will come from the remaining employees. The job cuts will take effect in late March, the company said.
Spokesman Rich Pesce said operations at the Herndon building will be "scaled back." He did not say which jobs will be eliminated and if any former Xohm employees will remain at the Herndon Xohm building.
The layoffs come after Sprint eliminated 4,000 jobs in the Washington region in 2008. The wireless carrier, ranked third in the nation in terms of subscribers with 50.1 million users, has lost a number of customers. The economy has weighed on all telecommunications and wireless carriers, which have seen demand soften for new cellphones and subscription plans.
Meanwhile, Clearwire denied a report that it would delay its rollout of WiMax technology -- high-speed wireless Internet -- in the District. Spokeswoman Susan Johnston said a report in Information Week about the delay of its network launch in the Washington area was "inaccurate" and that a schedule for rollout plans will be released in the coming weeks.
Clearwire, which operates in Portland, Ore., and Baltimore, was expected to compete with the largest wireless network operators, AT&T and Verizon. But analysts say the company will struggle to gain subscribers as consumers reduce spending. Tight credit markets also cast doubt over the company's ability to borrow funds to expand its network across the country.
