New York  - Struggling mobile-phone service provider Sprint Nextel Corp posted a first quarter loss Monday of 594 million dollars, as revenues decreased 12 per cent to 8.21 billion dollars.

The company lost 505 million dollars in the year ago quarter. It said that its current losses included a 327 million dollar charge related to a job cutting campaign that will see it shed 13 per cent of its workforce to save about 1.2 billion dollars a year.

The company, which is the third largest US cell phone carrier, continued to lose monthly subscribers to its largest rivals, AT&T and Verizon. But it almost offset those losses with gains to its Boost Mobile program which offers unlimited calling for 50 dollars a month without the need for customers to tie themselves in to lengthy contracts.

Sprint hopes that the launch of its new Palm Pre smartphone will help it attract and retain customers. The phone, which could be released early this summer, has been touted as a challenger to Apple's hit iPhone.

The earnings report came as The Wall Street Journal reported that Sprint is looking to outsource the management of its mobile network to Swedish telecom vendor Ericsson.

Discussions are entering the final stage and would result in 5,000 to 7,000 US employees moving to Ericsson, according to the report. Sprint would pay Ericsson some 2 billion dollars over a number of years and in the process cut network costs by about 20 per cent, according to the Journal.