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Positive spin for huge Sprint layoffs - more to come, though

A programme of cutting jobs by another 2,000 people brings Sprint's total of layoffs to 21,000 in two years. Some analysts see this as a trend which will get worse. But an Associated Press report puts a positive spin on the news, saying that this is a different kind of layoff from previous ones.

The report quotes Jeff Kagan, an Atlanta-based independent analyst, as saying that "The layoffs announced Monday were different from previous job cuts." Kagan continued: "The last few years there have been unhealthy cuts because it was just a company shrinking to try to survive. Now we're seeing reorganizational-based cuts, and those are always healthy, because it shows a company's focusing on a growth opportunity."

The company will announce later how much the job cuts will cost Sprint during the fourth quarter, company spokesman Mark Bonavia said.

Sprint announced last month that it lost $498 million in the third quarter in contrast to a $519 million profit a year ago.

But the positive spin didn't impress everybody. Financial analysts at Motley Fool suggest that the 3% workforce cut "might not sound like much, but given tepid demand and red-hot competition, the worst may not be over," and point out that Sprint is "not the only telecom concern hanging up on workers to control costs. The move follows similar announcements by Verizon, BellSouth, and SBC Communications."

The Fool's analyst says that Instant messaging and cellphones are the way of future communications. "The lion's share of my coast-to-coast communication is conducted via America Online's Instant Messenger and email, and many people operate the same way. Special occasions may warrant a call, but in most cases I let my fingers do the talking," summarised the writer.

The Fool also quotes a report in the Washington Post from Monday, which said that "tech-savvy adults under 30 are so enamoured of their cell phones that 27% of those surveyed consider ditching landlines altogether." In addition, the study indicated that 21% of overall users -- regardless of age -- were thinking of cancelling regular phone service in favour of cells.

It may not be the majority, but it seems a trend destined to continue, said the Fool report, adding: "Mobility has become as American as frozen apple pie."