NII Holdings (NIHD), which operates under the Nextel brand in Latin America, is facing hard times. The company, which recently delayed the launch of its 3G services across Latin America markets, announced it will cut about 20% of its workforce at its headquarters in Reston, Va. NII is also reassigning select positions located at its headquarters to its operations in Latin America. The company expects to incur one-time costs in the fourth quarter of approximately $8 million related to the headcount reduction at its corporate headquarters.
The re-aligning includes changes in certain resources and roles between its headquarters and market units in order to create a “stronger and more agile organization, and to facilitate future growth.”
According to NII Holdings, these actions are designed to increase its operational agility, to streamline decision-making and to begin reducing corporate headquarters costs, further strengthening the its ability to execute on its strategic priorities in Latin America.
The carrier recently launched 3G service across Peru, Chile and Mexico, and is expected to launch services in Brazil later this year. Earlier this year, many financial analysts noted that Nextel’s 3G plans could cause the carrier to become lost in a sea of rival 3G operators that have already launched commercial services. Nextel’s unique push-to-talk service could also suffer, since it is already struggling from a lack of compelling devices geared toward an increasingly smartphone-savvy public.
Steve Dussek, NII Holdings’ CEO, said the latest actions will provide the carrier with the right structure to capture the growth, scale and accountability required to succeed in its markets and achieve its long-term growth objectives. Dussek also noted the steps that have been taking fortify its ability to leverage services and technology in order to capture a larger share of the growing market for wireless communications in Latin America.
