Today, during their Q3 2010 earnings call, WiMAX network operator Clearwire announced that it would be slashing 15% of its workforce and instituting several “cash conservation measures” in an attempt to raise “short-term funding.” As the earnings brief reads:
While the Company is cautiously optimistic it will resolve its short-term funding needs in the near future, there can be no assurances. Thus, it is implementing a series of significant cash conservation measures to reduce costs, including: a substantial reduction in sales and marketing spending, a suspension of additional retail channel market launches of the CLEAR-branded operations in select markets including Denver and Miami, delays in the introduction of CLEAR-branded smartphones, a substantial reduction in the contractor workforce, a 15% reduction in the number of employees, and the discontinuation of development activities for sites not required for its current build plan. The Company currently has thousands of sites in various stages of planning and construction beyond its current build plan, and it intends to suspend zoning and permitting in a portion of those sites until such time as additional funding becomes available. These contemplated initiatives are intended to result in potential cost savings of between $100 million to $200 million in 2010 and again in the first half of 2011.
That certainly doesn’t sound good. We contacted Sprint for comment — as their 4G network depends on Clearwire — and they were kind enough to provide us with a statement. Hit the jump to read Sprint’s take on Clearwire’s situation.
Dan Hesse recently stated that Sprint has been in discussions with Clearwire regarding the financial status of its ongoing operations as well as Sprint potentially providing new financing. We expect those discussions to continue as we review alternatives with Clearwire. There is no assurance that the discussions will result in any transaction with Clearwire. Sprint is providing no additional comments on this matter at this time.
At Sprint, our 4G plans remain unchanged:
• Sprint has demonstrated unparalleled leadership in 4G. This dates back to our technology selection in 2006 and includes over two years’ experience running a 4G network which now covers 80 million people in over 60 markets. We will continue to demonstrate network leadership and innovation in 4G in the years to come.
• This leadership has resulted in increased market share, especially in iconic devices like the EVO and Epic 4G. Sprint currently offers a dozen 4G devices and is on its third generation of several 4G devices before the competition’s launch of a single device.
• While our leadership will resolve these matters, Sprint’s sales teams and retail associates will remain focused on leveraging 4G to enrich the lives of our customers and deliver solutions that save businesses time and money.