Dec 9 NII Holdings Inc, which provides
telecom services under the Nextel brand in Latin America, said
it would cut more than 1,400 jobs in its market operations and
over 25 percent of the workforce at its Virginia headquarters.
NII shares fell 7 percent in premarket trading.
The company said it expected to incur employee severance
costs of $25 million to $35 million, most of which would be
accounted for in the fourth quarter.
NII, which operates in Mexico, Brazil, Argentina and Chile,
had about 16,100 employees as of December 2012.
The company said it expected annual cost savings of $50
million to $55 million from the job cuts, which are a part of a
restructuring plan announced in October to regain market share
from bigger rivals.
Under the plan, the company will also launch aggressive
marketing campaigns and pricing plans, and offer smartphones
such as Samsung Electronics' Galaxy S4, HTC's
Telefonica Brasil SA and billionaire Carlos
Slim-controlled America Movil have been luring NII's
higher-paying business customers with their unlimited call plans
and faster and bigger networks.
NII also said on Monday that it expected higher prepaid
subscriber deactivations in Mexico than estimated previously as
it had modified its policy for inactive prepaid users.
The company forecast a net subscriber loss of about 400,000
in Mexico for the fourth quarter ending December. NII had a
total subscriber base of 9.7 million as of September, including
3.7 million users in Mexico.
The company said in October that it would miss its full-year
profit forecast, mainly due to subscriber losses in Mexico and
higher investments in its 4G network.
NII shares have dropped 45 percent since then. The stock was
trading at $2.40 before the bell on Monday.