Sprint seeks new CEO amid shakeup

NEW YORK -- Sprint, reeling from news reports that it is searching for a new CEO, plans to announce that its chairman and CEO, Gary Forsee, is stepping down, according to people familiar with the board's plans.

Sprint, which could announce Forsee's departure as early as Monday, plans to appoint an interim successor until a permanent replacement can be found, these same sources said. They declined to be identified by name or affiliation because no official announcement has been made by Sprint.

Reached Sunday, Sprint spokeswoman Leigh Horner declined to comment.

The management shakeup follows efforts by Forsee and the board to recruit a chief operating officer, with the understanding that the person would become Sprint's CEO. Though some potential candidates were approached, the job was never filled.

After Sprint's disappointing second-quarter earnings report, however, the board decided that new leadership was needed and started looking for a new CEO, the sources said. The search process began in earnest in late summer, with the goal of finding a suitable replacement by year's end.

The board had hoped to keep its plans under wraps, the sources added, at least for a while. But the timetable got sped up after The Wall Street Journal reported — on Thursday on its website — that a CEO search was underway.

The story, which riveted the telecom world, put a spotlight on Sprint. The company responded with a firm "no comment," but the attention put pressure on the board: As a publicly traded company, Sprint is obliged to disclose "material" developments that might be of interest to investors. No development is more material, perhaps, than a CEO change.

Since merging with Nextel in 2005, the combined company has struggled with a series of operational problems. All the pain has shown up in the stock price, which is down about 27% since the $35 billion Sprint-Nextel merger closed in August 2005.

Adding to investors' concerns, No. 3 Sprint has continued to show tepid subscriber gains — a key measure of a wireless company's health — since merging with Nextel.