Clearwire Cuts Jobs Amid Cash Crunch
Wireless operator Clearwire Corp. warned its continued losses and uncertainty about new financing raises substantial doubt its ability to continue to operate.
The “going concern” disclosure, in a Thursday filing with the Securities & Exchange Commission, comes as the company, which is majority owned by Sprint Nextel Corp., said it was taking drastic action to cut costs as it awaits new financing.
Clearwire faces a cash crunch at the end of the year, illustrating the high costs associated with building a brand-new 4G network. As a result, the company is cutting 15 percent of its 4,200 employees, suspending its launch in markets including Denver and Miami, and delaying the introduction of a branded smartphone.
The moves are expected to save $100 million to $200 million this year, and a similar amount through the first half of 2011. Chief Financial Officer Eric Prusch said on a conference call Thursday the company has enough cash to last through the middle of next year.
