Sprint Nextel is reportedly considering various outsourcing options in a desperate bid to cut costs.

The beleaguered telecommunications giant will be "cutting costs dramatically across the organisation, including exploring an IT outsourcing (possibly to IBM) and outsourcing some of its network operations to Alcatel Lucent or Ericsson," explained Phil Cusick, an analyst at Macquarie Research.

The cost-saving method, often referred to as "re-badging," would transfer certain employees from Sprint's payroll to an external vendor.

According to Cusick, Sprint could outsource up to 5,000 to 10,000 employees who maintain its wireless networks.

"Network outsourcings typically involve transferring the affected network operations employees (though not the network itself) to the vendor, which will then 'right-size' the cost structure. Given (Sprint's) redundant iDEN and CDMA workforces, we would expect significant layoffs (including in Kansas City) that (Sprint) may not have the political stomach to do itself," added Cusick.

Sprint CEO Dan Hesse confirmed that the company was examining various ways to reduce expenses, including possible "headcount reductions".

"Given the economic climate, we are weathering it fairly well so far. We will see how we do in the fourth quarter. There could be head count implications for the company going forward," said Hesse.

Sprint, which recently reported third-quarter losses, has also offered voluntary redundancy packages to an unspecified number of its 57,000 workers. Employees have until 3 December to apply for the voluntary buyout. X

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