Many were not surprised on Friday when Sprint announced it’s slashing the workforce by 75 percent at Clearwire, the wireless Internet company it acquired in July.
It’s a case of “My, what beautiful spectrum you have! Employees? Not such a pretty picture and way too many of them.” Many analysts believed Sprint bought Clearwire for the sole purpose of gaining access to more radio frequencies.
Radio spectrum is the lifeblood of wireless companies, who need it to acquire more customers to expand their business. Others purchase spectrum, at least in part, as a way to keep it out of competitors’ hands.
During a bidding war with Dish Network, Sprint raised its offer several times before closing the deal. Coincidently, the Sprint-Clearwire deal closed about the same time Softbank purchased Sprint for $21.6 billion.
“Clearwire and Sprint have completed the process of notifying Clearwire employees about their long-term job status with the combined company,” said Sprint spokeswoman Susan Johnston, quoted by GeekWire.
“Hundreds of Clearwire employees involved in serving existing Clearwire customers and the ongoing LTE network build project will continue with Sprint long-term, predominantly in Bellevue, Wash., and Herndon, Va. However, approximately 75 percent of Clearwire’s pre-acquisition workforce will be affected by the separation process.”
At the end of September 2012, Clearwire had 1,053 employees, but it was unclear how many people worked for the company prior to the Sprint acquisition, Geekwire said. Under the deal, Sprint bought the 50 percent of Clearwire it did not already own.
The post-acquisition departure of Clearwire CEO Erik Prusch and an earlier statement from the company suggested the serious cuts could be coming for the company under Sprint ownership.