• by Steve McClellan  @mp_mcclellan, May 17, 2016

As part of an effort to hack more than $2.5 billion out of the cost side of its balance sheet, telecom company Sprint Communications has created an in-house advertising agency called YellowFan Studios.

The new agency is being led by Christopher Bennett, who joined the company last year as director of innovation and creative media. He’ll report to Tracy Palmer, VP of Advertising and Brand Strategy.

A Sprint rep said that the idea for the new agency was conceived earlier this year. “Sprint is in the midst of a multi-year transformation. We are reimagining everything we’re doing to operate more efficiently and more effectively. This is one example of that among many others.”

Currently the new in-house shop has about 30 staffers and is focusing on the company’s creative content and messaging strategy. The rep said that the company is still determining how big the agency will grow in terms of staff.

The development isn’t great news for the firm’s creative AOR—Deutsch—which won the Sprint account in 2014 but has reportedly laid off staff in reaction to Sprint’s pulling some production work from the agency. And the rep confirmed that the new in-house shop is designed to help reduce marketing costs as well develop the company's creative vision.

That said, the Sprint rep stressed that the idea is not to ultimately bring all advertising in-house. “Deutsch remains our consumer market agency of record. Alma remains our Hispanic agency of record,” he said.

The firm’s advertising efforts have been in a fish bowl for the last two-plus years since parent Softbank CEO Masayoshi Son blasted Sprint’s advertising effort in a guest column written for Nikkei Asian Review, in which Son said that “Sprint spends a large amount of money on advertising every year, but its effects have been almost negligible.”