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Sprint to lay off 4,000
Sprint Nextel has confirmed layoffs to the tune of 4,000 by the middle of this year, but the company remains mum on rumors that it will consolidate its Reston headquarters to Overland Park, Kan., the site of the company's operational headquarters.
The Wall Street Journal first reported the possibility of the layoffs and the relocation on Monday, Jan. 14.
Spokeswoman Leigh Horner said the company has “not made any decisions on that front.”
Nearly 4,500 people work at the Reston headquarters but spokesman Richard Pesce said the company does not “typically break out where those employees live.”
Sprint Nextel occupies approximately 1,300 square feet of office space in the county, 86 percent of that in Reston. Forty percent of that total space is owned by the company and the rest is leased.
The layoffs come on the heels of Dan Hesse stepping in as the new CEO in December.
In addition to the layoffs, the company will be closing 4,000 “third party distribution points,” such as electronic stores that carry Sprint services and 125 company-owned retail locations. Those actions are expected to reduce company costs an estimated $700-800 million by the end of the year, according to a company press release.
While layoffs will be complete by mid-year, Horner said the retail outlet closures will likely take longer as stores wait out leases.
The company has been plagued by problems since Sprint and Nextel joined in 2005. What was Nextel's headquarters in Reston then housed the newly merged companies.
A Sprint-Nextel employee said the announcement and rumors were not unexpected, given the problems and “chaos” caused by the merger.
“The main feeling from legacy Nextel people is that all decisions have been made by legacy Sprint without consideration for the future,” she said. “I don't think the company will ever be successful until those in charge realize that the Sprint way is not the only way.”
The company has not addressed the rumors of a headquarters move to its employees, but has provided general figures as to where departmental layoffs will occur, the employee said.
“The atmosphere has changed a bit, more of not knowing what is going to happen.”
Steve Fuller, an economist at George Mason University's Center for Regional Analysis, said Sprint-Nextel's exit from Reston would not have a significant impact on the county's economy.
“Fairfax County has a 2.1 percent unemployment rate, we have a shortage of highly-qualified workers." Most former Sprint-Nextel employees "would probably find a pretty good job if they wanted to,” he said.
As for the county's reputation, Fuller said its economy is so strong that it would easily withstand the change. Fuller's annual economic forecast for the county has a projected increase of 13,000 jobs and its unemployment rate remains well below the national average of five percent.
“Fairfax County has such a strong economic base that it can weather big storms, and this isn't a big storm,” he said.
Mark Looney, chairman of the Greater Reston Chamber of Commerce, of which Sprint Nextel is a member, said the company has contributed a lot to the community during their time here.
“Certainly our hope, desire, wish and beg is that they would not leave Fairfax County; we've been fortunate to have them here,” he said.
Despite that wish, Looney said he felt confident enough in the region's continued growth that such an exodus would not negatively impact Reston's economy.
If it left the Reston headquarters, the company would be leaving a sizable amount of commercial property in Reston, but Looney said its location will hopefully continue to be a highly desirable one.
“Its proximity to what we all hope will be the Reston Parkway rail station, in that respect it's a great location,” he said.
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