Sprint announced plans to wind down its Web hosting businesses and transition current hosting customers to preferred third-party providers. Sprint will no longer pursue direct sales of hosting, including managed hosting and collocation services, to enterprises. However, Sprint will continue to focus on IP-related products and services that are critical to hosting, such as managed services and network transport on its Tier 1 IP backbone. The decision will involve phasing out eight Sprint E|Solutions Centers located in Atlanta, Boston, Dallas, Denver, Los Angeles, New York City, Sacramento and Santa Clara. Two other Sprint E|Solutions Centers in the Kansas City area and in Reston, Virginia will be converted into corporate data centers supporting other Sprint network capabilities. About 500 employees are affected by the decision. Sprint expects to report a charge of approximately $0.20 per-share against its FON Group earnings for winding down the hosting business.
Separately, Sprint will take pre-tax charges of approximately $36 million in connection with separation agreements agreed to by Sprint and William T. Esrey, former chairman and CEO; Ronald T. LeMay, former president and COO; and J. Richard Devlin, former executive vice president - general counsel, external affairs and corporate secretary. The charges include $15 million of non-cash expense associated with accounting for modifications to certain terms of stock options granted in prior periods. Over the next four quarters, Sprint will also take pre-tax charges of $6 million related to the consulting and non-compete components of the separation agreements.
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- In March 2003, Gary D. Forsee was named CEO of Sprint, replacing Bill Esrey. Forsee previously served as vice chairman of BellSouth Corporation where he had responsibility for the company's domestic operations. Before that, Forsee spent 10 years with Sprint, holding leadership positions in the company's long-distance and PCS operations, and one year with Global One, a joint venture of Sprint, Deutsche Telekom and France Telecom, where he served as president and CEO.
