Sprint Nextel plans to cut between 2,000 to 2,500 jobs in an effort to save $350 million in annual expenses. Most of the cuts will happen by the end of the year.

The announcement marks Sprint’s second round of layoffs this year. Last January, Sprint said it would cut 8,000 jobs from its workforce.  Sprint later signed a deal worth about $5 billion to outsource its network operations to Ericsson. The agreement transferred about 6,000 Sprint employees to the Swedish infrastructure giant.

Sprint currently employs about 42,000 people. The layoffs will cost the company between $60 million and $80 million in severance pay over the next quarter.

In a statement, the company said the layoffs were necessary to stay competitive and “remain financially secure in a challenging economic environment.”

Less than two weeks ago, Sprint reported that its losses widened to $478 million in the third quarter. Its churn rate hit 2.17 percent and the carrier lost 135,000 net retail subscribers.

Sprint also recently lost its contract to provide wireless connectivity to the Kindle. AT&T will now provide the service. Sprint’s shares dropped 6 percent on the news.

Sprint has made a concerted effort over the past two years to beef up its network performance and improve its notoriously bad customer service. They’ve also spruced up their device portfolio with the likes of the Palm Pre and HTC Hero, and offer substantially less expensive plans than other Tier One competitors.