Dive Brief:
- In an effort to save money, Sprint announced in a memo that they will be cutting employee benefits, including a freeze on raises, reduced severance pay, increased out-of-pocket healthcare costs and a recently adopted snacks program. Layoffs may also be on the horizon, The Verge reported.
- In an earlier memo from the company’s chief financial officer, Sprint revealed they want to cut $2.5 billion over a six-month period, the Verge said.
- Sprint joins companies like Kraft Heinz that are cutting benefits in a competitive job market where many companies need to boost benefits in order to compete, according to SHRM.
Dive Insight:
Sprint is struggling to pare down its spending to sales ratio, as it ranks “several” points higher than its competitors T-Mobile, AT&T and Verizon, The Verge reported. The snacks program, in particular, was going to cost $600,000 a year. (Kraft Heinz also cut their free snack program earlier this year in order to cut costs.)
The freeze on raises and reduced severance pay reflect similar compensation issues throughout the HR industry, which is why many are turning toward benefits to make up for it. However, healthcare is a top talent retaining benefit – and putting more cost on the employee, while financially sound, won’t win many points with the workforce.
It won’t just be the “rank and file” that feels the squeeze, The Verge said. Executives will no longer be allowed to hire limos during business travel. They, like everyone else, will have to settle for taxis or Uber.
