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Dear Team,

I am sorry that this didn’t go out Thursday night, but we had just too many things going on. Even though we had such a busy week, I want to make sure that everybody has this information so we are sending it out on a Sunday night!

I’ve been talking with you about the need to radically transform our company, and it’s clearer than ever that this is going to require us to move quickly, be decisive and take bold actions. Our aim is to make Sprint stronger than it is today. With Transformation, we must achieve two things: We have to grow, and we are making progress. And, we have to take costs out. As Tarek Robbiati, our CFO, told all of you this past week, we must reduce our cost structure by $2 billion to $2.5 billion in the next six months. To put things in perspective, that’s about a 10% reduction in our operating expenses.

I’m sure that many of you noticed the recent media coverage focusing on the changes that are coming to our company. There really is nothing in those headlines that we haven’t talked about together already. And what many of the reporters missed is the bigger picture of what we will accomplish with our Transformation.

Lowest Cost Structure is critically important, but that is only one of the 6 Pillars guiding our work. We must radically change how we do business. We will continue making investments in improving our network, which is our product. We will continue to be aggressive in pursuing growth, making the investments that we need so we can acquire and retain customers. We also will continue to innovate with iPhone Forever, device leasing and other initiatives that have other carriers, and even companies such as Apple, following Sprint’s lead.

And yes, a key part of Transformation involves managing our costs. We continue to make progress on our overall Transformation plan, but there are going to be opportunities that require us to act right away. I want to tell you now about a decision we just made this past Wednesday.

After a thorough review, we decided that we will not offer salary increases this year. We have to take billions of dollars out of our business, and everything counts. There are times when we have been very generous, including this spring with our largest short-term-incentive compensation payout in Sprint’s history. Even though our company was not making money at the time, we had made a commitment with the STI program. The members of our team did their part by hitting, and in many cases surpassing, the performance targets. I made sure that we honored our commitment. And our programs such as STI and sales compensation plans continue to be good opportunities for us to provide incentives and reward performance.

When we considered whether to move forward with salary increases, however, I decided that now is not the right time. This was a tough decision, but I stand behind it. We must save every dollar we can, which ultimately will help limit the number of jobs we need to eliminate.

Nothing is beyond consideration. When our executives do need to travel for business, I have made it clear that we expect them to take taxis or use Uber, and they are prohibited from renting a limousine and a driver for an entire day. In the executive offices, we served free snacks over the past few months. But it turns out that cost $600,000 over a full year, and that is not reasonable. The snacks are going away, and anything that is absolutely not necessary will be going away until we have adjusted our cost structure.

Supporting Transformation

I am absolutely determined to turn Sprint around. We won’t be able to succeed unless we can count on everybody’s commitment and contribution to these efforts. I realize that this is not easy to hear, which makes me feel even more encouraged by the emails I have received from many employees who say they understand that we need to take these steps.

While we continue to review our spending and develop our Transformation plan, there is a way that many more employees can contribute right now. We have been able to eliminate stupid rules and act on ideas that can help our company get better when many of you have sent in emails with your ideas. I’m hoping that we can take a similar approach with eliminating unnecessary spending. Each of us should act as if we owned the company, and make sure we are not spending money unless it’s really needed. I’m confident that the Transformation Office will help us manage this, but I know how powerful it can be when we get others involved. If you see examples of spending that don’t make sense, let us know. Send an email to me, to Tarek, to Mike Bucy, our chief transformation officer, or to [email protected].