NII To Eliminate Over 25% Of Headquarters' Staff, 1400 Jobs In Market Operations

(RTTNews) - NII Holdings Inc. (NIHD) disclosed further details regarding its planned realignment in connection with its recently announced Project Accelerate initiative.

As per the Project Accelerate initiative, the company will be implementing a restructuring and organizational realignment plan designed to simplify the roles and responsibilities of its headquarters and market organizations and better align its costs and organizational structure with its growth strategy. The plan includes reductions of over 25% of the Company's headquarters' staff and the elimination of over 1,400 positions in its market operations.

The company said it expects to incur cash costs related to employee severance in the range of $25 million to $35 million in connection with the plan, which include $8.6 million in charges related to restructuring activities at the Company's Mexico operating subsidiary that were accounted for in the company's third quarter 2013 results. Most of the remaining costs are expected to be accounted for in the Company's results for the fourth quarter of 2013.

The company noted that it expects to realize annualized cost savings of $50 million to $55 million as a result of these actions.

In addition, the company noted that it has modified its customer deactivation policy for inactive prepaid subscribers. As a result, the Company expects a higher level of prepaid subscriber deactivations in Mexico than previously estimated. Taking this adjustment into account, the Company expects a net subscriber loss of about 400,000 subscribers in Mexico for the fourth quarter 2013. This policy change is not expected to have an impact on net subscriber additions in Brazil or other markets, the company said.