THE UNIVERSITY HAILY KANSAN
TUESDAY JANUARY 27 2009
NEWS
7A
ECONOMY
Sprint announces more layoffs, cost-cutting efforts
ASSOCIATED PRESS
Sprint Nextel Corp., which has headquarters in Overland Park is slashing its already shrinking work force. Sprint Nextel, the nation's third-largest cell phone provider, announced Monday that it would lay off 8,000 workers.
ASSOCIATED PRESS
KANSAS CITY, Mo. — Faced with persistent subscriber losses and questions about its long-term prospects, Sprint Nextel Corp. is slashing its already shrinking work force by 8,000 people as it seeks to cut annual costs by $1.2 billion.
The layoffs, announced Monday, are just the latest attempt by the nation's third-largest cell phone carrier to right its financial ship in the face of tough competition and a brutal economy.
Sprint said it expects the latest round of layoffs, which represent a 14 percent reduction of its 56,000 employees, will be largely completed by March 31. The company said it would take a first-quarter charge of more than $300 million for severance and other costs.
They come slightly more than a year after the company cut 4,000 jobs and closed 125 retail centers as Chief Executive Dan Hesse, then new on the job, aimed to show he was serious about streamlining operations.
About 850 of the layoffs are voluntary, through employees taking buyouts. They will make up about $45 million of the total severance
In addition to the cuts, Sprint said it will suspend its 401(k) match for the year, extend a freeze on salary increases and suspend a tuition reimbursement program.
"Labor reductions are always the most difficult action to take, but many companies are finding it necessary in this environment," Hesse said in a news release. "Our commitment to quality will not change."
Technical problems, poor efforts to consolidate the two companies and stiff competition for feature-rich phones, such as the Apple Inc. iPhone on AT&T's service, have led many subscribers to switch.
costs, the company said in a securities filing.
The Overland Park-based company has struggled since acquiring Nextel Communications Inc. in 2005.
As of Sept. 30, Sprint had 50.5 million subscribers, down 3.5 million from a year earlier. The falloff contributed to the $1.18 billion net loss that Sprint posted through the first three quarters of 2008.
Sprint shares rose 3 cents, or 1.2 percent, to close at $2.49 on Monday.
"Given the current state of operations, (the layoffs were) probably
the right thing for them to do," said analyst Christopher King at Stife Nicolaus.
He doesn't see Sprint as a bankruptcy candidate, at least not for two years.
"But certainly as you get into 2011, depending on how their operations shake out over the next couple of years, there could potentially be some concerns there," he said.
The company's layoff announcement comes a month after AT&T Inc. announced it was cutting its work force by 4 percent, or 12,000 jobs, to deal with the effects of the recession and the continued erosion of its traditional wireline business.
Another analyst, John Hodulik at UBS, wrote in a research note Monday that it might be difficult for Sprint to turn the tide of subscriber losses, given that nearly everyone already has a cell phone and few people switch between the major carriers.
However, AT&T's wireless arm has been gaining subscribers, as have Verizon Wireless and T-Mobile USA.
Sprint Nextel has had some bright spots. It recently announced a new $50 per month unlimited voice and data plan under its Boost prepaid
Analysts expect it to attract many people who can't qualify for or don't want to sign two-year contracts.
brand, which doesn't require customers to be tied to contracts.
Also, Sprint will soon be the exclusive seller of the Palm Pre smart phone, a touch-screen device expected to rival the iPhone. The Pre is set to debut in the second half of this year.
Sprint spokesman James Fisher said the company hadn't determined how the newest layoffs will be divided between divisions or geographic locations, including suburban Kansas City, where it is the area's largest private employer.
But he said the company would likely avoid significant reductions in its customer service and network quality divisions, where Sprint has tried to improve in recent years.
Jeff Kagan, an Atlanta-based wireless analyst, said in a report that while Sprint's cost-cutting efforts were notable, they couldn't save the company on their own. He discounted the effect of the economy, since Verizon Wireless and AT&T have continued to do well.
"If the economy recovered tomorrow I think Sprint would continue to suffer," Kagan wrote.
POLITICS
Ex-detainees rejoin al-Qaida forces
ASSOCIATED PRESS
SAN IUAN, Puerto Rico — The re-emergence of two former Guantanamo Bay prisoners as al-Qaida threatens.
Frank Ciluffo, a researcher on security issues at George Washington University, said a
past week won't likely change U.S. policy on transfers to Saudi Arabia, the Pentagon said Monday.
The Saudi Interior Ministry official said most of the graduates "resumed their natural lives and some of them voluntarily contributed to the activities of this program to help others return to natural life."
More than 100 Saudis have been repatriated from the U.S. military's prison at Guantanamo Bay, Cuba, to Saudi Arabia.
where the government puts them through a rehabilitation program designed to encourage them to abandon Islamic extremism and reintegrate into civilian life.
The online boasts by two of these men that they have joined al-Qaida in Yemen underscore that the Saudi system isn't fail safe, the Pentagon said. A U.S. counterterrorism official in Washington confirmed the men had been Guantanamo detainees. The official spoke on condition of anonymity because he was not authorized to disclose that fact on the record.
Navy Cmdr. Jeffrey Gordon, a Pentagon spokesman, said the U.S. saw the Saudi program as admirable.
The deprogramming effort — built on reason, enticements and lengthy talks with psychiatrists, Muslim clerics and sociologists — is part of a concerted Saudi government effort to counter the ideology that nurtured the 9/11 hijackers and that has lured hundreds of Saudis to join the Iraq insurgency. Fifteen of the 19 hijackers who attacked the United States on Sept. 11 were Saudis, as is the mastermind of the attacks, Osama bin Laden.
"The best you can do is work with partner nations in the international community to ensure that they take the steps to mitigate the threat ex-detainees pose," he said. "There are never any absolute guarantees. There's an inherent risk in all detainee transfers and releases from Guantanamo."
A total of 218 men, including former Guantanamo detainees, have gone through the reintegration program, according to the Saudi Ministry of Interior. Nine were later arrested again, an "official source" at the ministry said in a dispatch from the official Saudi Press Agency. The report said some of the nine were former detainees, but did not give a breakdown.
"The best you can do is work with partner nations... There are never any absolute guarantees."
JEFFREY GORDON
Pentagon spokesman
program that doesn't work all the time is better than none because the alternative is an extended prison sentence, which only further radicalizes a person.
"I think that just fuels and gives legitimate grievances to the adversary which stick," Cluffo said.
He said Singapore, Indonesia and Yemen have programs too,
but Yemen's was suspended for lack of funds.
The two men who went through the Saudi rehabilitation program and resurfaced in Yemen were seen in video clips posted on the Internet last week.
One man gave his name as Abu al-Hareth Muhammad al-Oufi, whose prisoner number when he was held by the U.S. was 333.
According to documents released last year, the detainee claimed he was twice beaten by Americans, after he was captured in Pakistan in 2001 and was being flown to Afghanistan, and again after he landed at the Bagram
"By Allah, imprisonment only increased our persistence in our principles for which we went out, did jihad for, and were imprisoned for," said Said Ali al-Shhri, whose prisoner number was 372.
The interior ministry official said the two former detainees have made things more difficult for Saudis who remain at Guantanamo.
Those who join extremist causes after they are released "reduce the chance of the return of the rest of the detainees whose families are waiting for them and (are) looking forward to their return home," the official said, according to the Saudi Press Agency.
hardened them.
detention center in Afghanistan. The other former detainee said their detention by U.S. forces only
About 22 Saudis are among the 145 men still at Guantanamo, according to a study by the Brookings Institution, a think tank in Washington. The largest group of prisoners is from Yemen.
More than 500 men have been freed from Guantanamo Gordon
"I think that just fuels and gives legitimate grievances to the adversary which stick."
FRANK CILUFFO Researcher
said 62 are "confirmed or suspected" of involvement in "terrorist activities."
The Pentagon has not identified these former detainees, and has not said how it defines terror activities other
than excluding actions such as engaging in propaganda.
INTERNATIONAL
Fishmongers ban tourists from Tokyo's tuna market To prevent tourists from interfering with auctions during peak buying season, the world's largest fish market bans their presence
ASSOCIATED PRESS
TOKYO — Tourists are known for acting silly, but licking the tuna?
Overwhelmed by a growing number of misbehaving tourists, Tokyo fishmongers banned all visitors from one of the city's most popular tourist destinations — the pre-dawn tuna auctions at the world's largest seafood market.
Frozen tunas are carried on a cart at Tsukiji fish market in Tokyo on Jan. 19. Overwhelmed by an increasing number of misbehaving tourists at the world's largest seafood market, Tokyo fishmongers last month decided to put their foot down, temporarily banning all visitors from one of the most popular tourist destinations in the city — their predated tuna auctions.
The ban, imposed during the peak New Year buying season, was lifted last week. Now, the tourists are back, but the debate goes on: Can tourists be trusted around the tuna?
"We understand that the sight of hundreds of frozen tuna looks unique and interesting for foreign tourists," said Yoshiaki Takagi, deputy director of the market. "But they have to understand the Tsukiji market is a professional place, not an amusement park."
One of the more notorious recent cases was that of a tipsy British tourist — caught on tape by a Japanese TV crew — who licked the head of a frozen tuna and patted its gill.
"Tuna is a very expensive fish," Takagi said. "One tuna can easily cost more than 1 million yen
Nearly 90 percent of visitors for tuna auctions are non-japanese, Takagi said.
($11,000). But some tourists touch them and even try to hug them."
Fed up, the market decided to impose the ban.
After the ban was lifted, the market began distributing leaflets at the
entrance of the tuna auction site in English, Chinese, Korean and Russian, as well as Japanese. Along with the no-flash warning, it tells visitors to stay within the observation area and leave promptly after the auctions, which open at 5 a.m.
The post-ban crowds have been better behaved.
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