Sprint Nextel will cut 8,000 jobs as the company seeks to preserve cash among growing customer losses.

Additional moves reportedly being considered include shifting thousands more Sprint workers to other companies in outsourcing contracts, but the company didn't make any announcements on that point Monday.

The Sprint board signed off on the move to cut labor costs by $1.2 billion a year late last week. Robert Brust, who became Sprint’s chief financial officer in May 2008, has been signaling for weeks that a major shake-up was coming early in the new year.

The actions include the elimination of approximately 8,000 positions within the company, which is expected to be largely completed by March 31. The positions to be eliminated will impact all levels of the company, and the impact on geographic locations will vary.

"Labor reductions are always the most difficult action to take, but many companies are finding it necessary in this environment," Sprint CEO Dan Hesse said in a statement. "We continue to improve the customer experience and these improvements are reflected in much higher levels of satisfaction in customer surveys and in independent performance tests. Our commitment to quality will not change."

About 850 workers included in the 8,000 job cuts sought a voluntary separation plan started late in 2008.

Sprint said the job cuts will bring a charge of $300 million in the first quarter of 2009.

The company also said it would suspend the 401(k) match for 2009, extend a 2008 suspension of annual salary increases through 2009 and suspend the company's tuition reimbursement program for 2009.

Industry observers, as we have been noting, for example, here, here and here at the Sprint Connection starting last November, have been projecting massive layoffs for the nation’s third-largest wireless company and the largest private employer in the Kansas City area.

Sprint made a similar announcement one year ago when it said it was closing 8 percent of its, cutting 4,000 jobs and reducing the use of outside contractors in an initiative to "streamline its business" following a sharp reduction in customers.

The company later also took a $29 billion accounting write off to reflect its weakened business.

The customer losses continued throughout the year.

Through the end of September, Sprint’s 2008 net loss already had topped more than $1.1 billion. It continued its subscriber-losing streak in the third quarter, shedding another 1.3 million customers.

The company had 50.5 million customers through the end of September, though that number is expected to drop further when Sprint reports its final tally for 2008 in the coming weeks.

In addition to the layoffs, Sprint resorted to taking other cash-preservation steps in 2008, including capital spending cutbacks. Network investments and other capital projects totaled $485 million in the third quarter, down from $646 million in the prior quarter.

Sprint had more than $22 billion in debt on its books through the third quarter, with several billion dollars of it coming due in 2009 and 2010.

Executives had explored selling off chunks of the company, including the Nextel portion of the wireless business.

Hesse had indicated that several suitors emerged to express interest. Whether would-be buyers were unable to arrange financing in these times of tight credit, whether they wouldn’t agree to Sprint’s price demands or some other reason, the company ultimately did not do a deal.

Late last fall, Hesse expressed renewed commitment to reinvigorating the Nextel brand. Sprint since has launched new phones, new pricing and new marketing to follow through on these promises.

Finding a buyer for other Sprint assets seemed unlikely considering the credit squeeze, Sprint executives have said recently.

While that settled, at least for now, major lingering questions about the fate of Nextel, Sprint still had other pressing financial matters that were going to demand attention imminently.

Sprint already offered buyouts to workers late last year, it began planning for other job cuts and it began negotiating to have other companies take over various information technology operations.

"The main focus for 2009 is cash, keeping the company completely liquid in this economy," Brust said in a December interview with Reuters. "We're going to carefully look at the cost structure .... Everything's on the table."

On Monday, Sprint said the "labor cost reductions are the latest action in the company's efforts to make its cost structure more competitive in the industry and to remain financially secure in a challenging economic environment."

In the second half of 2008, the company paid back $2 billion in debt and renegotiated its credit agreements "with the expectation of sufficient liquidity to pay debt coming due during the next two years."

By the end of the third quarter, Sprint had a cash balance of $4.1 billion, and said that it had expected to continue to generate Free Cash Flow in the fourth quarter.

Phil Cusick, an analyst at Macquarie Research, issued a report months ago stating that Ericsson and Alcatel Lucent were the remaining bidders for a contract for Sprint to outsource as many as 5,000 to 10,000 employees now running networks for the company.

"Network outsourcings typically involve transferring the affected network operations employees (though not the network itself) to the vendor, which will then 'right-size' the cost structure," Cusick stated at the time. "Given (Sprint's) redundant iDEN and CDMA workforces, we would expect significant layoffs (including in Kansas City) that (Sprint) may not have the political stomach to do itself."