Sprint CEO Marcelo Claure has called his company’s turnaround one of the “most difficult” in the world.
And so it’s with that mindset that Claure reports third-quarter earnings this week, slashing everything he can in search of meeting a goal of cutting $2.5 billion in expenses for 2016.
According to a Wall Street Journal article, those cuts now include free water and snacks that Claure had been providing employees to the tune of $600,000 a year. Reports have also surfaced that Sprint will be cutting health care benefits, and executives will no longer be allowed limousines for transportation and will instead have to settle who for Uber or a taxi.
Sprint CFO Tarek Robbiati told the Journal that the company will have to be “creative” in meeting its goal, adding that the Band-Aid will have to be ripped off “pretty fast.” An ominous statement for mid-level employees who have already been told that severance packages for those let go after January 1 will be halved from two weeks pay for every one year worked to just 1 week of pay for every year worked.
Sprint currently employs about 31,000 people but that number will likely be pared in the coming months.
Sprint is coming off a second quarter that seemed to please Wall Street, sending shares up 10 percent immediately following the call. Sprint beat expectations and raised its forecast for the third quarter, reporting operating income of $501 million on $8 billion in net operating revenues. Sprint raised its forecast for fiscal year 2015 Adjusted EBITDA from a range of $6.5 billion – $6.9 billion to $7.2 billion – $7.6 billion. That marked a 12 percent increase over prior guidance.
Consensus is that Sprint will come in with a loss when the company reports its third-quarter results on Tuesday. Thomson Reuters forecast revenue of $8.1 billion in revenue, off 4 percent annually, with losses amounting to $0.08 per share.
Sprint’s Chairman, Masayoshi Son is doing his best to stay involved at the company. Son recently purchased a house in Kansas City where Sprint is headquartered.
Shares of Sprint were up 2.5 percent to $4.85 as of 10:07 ET.