Sprint Nextel Corp., the third biggest mobile service provider in the U.S., announced its decision to cut close to 8,000 jobs, whihc equals about 14 percent of its total workforce. The action is part of a restructuring plan looking to reduce the labor costs by close to $1.2 billion a year.

The company is looking to complete the task by March 31, and estimated severance and related costs at about $300 million. About 850 employees will be eliminated through a voluntary separation plan which began at the end of 2008. In addition to these changes, the cost reductions will also include a suspension of matching funds to employee 401(k) accounts in 2009, an extension of the 2008 salary freezes, and also a suspension of its tuition reimbursement program during 2009.

"Labor reductions are always the most difficult action to take, but many companies are finding it necessary in this environment," explained Sprint’s CEO Dan Hesse 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," he added.

Similar strategies have been also announced by other major companies in the United States. Caterpillar Inc. announced the workforce reduction of its divisions by 20,000 jobs, Philips Electronics plans to let go 6,000 of its employees and Home Depot will also cut more than 7,000 jobs. Other companies are also expected to announce similar decisions, as this appears to be the first step for reaching a safe ground.