Proposed US wholesale LTE network LightSquared is to let 45 percent of its workforce go as it continues to battle for regulatory approval, reports Reuters. The company currently has 330 employees, but has said it needs to cut the jobs to save money, calling the move a "prudent and necessary cost savings measure to ensure the long-term success of the company."

The Federal Communications Commission (FCC) said last week that it planned to withdraw its approval of LightSquared’s network after tests by a government agency reported that it would interfere with critical GPS devices and transmission. The issue arose due to LightSquared’s network using a spectrum band close to that used by GPS devices.

LightSquared questioned the validity of the tests carried out on behalf of the Space-Based Positioning, Navigation, and Timing Executive Committee, saying they were “rigged” by GPS device manufacturers and government end users to produce “bogus results.” The company recently said it remains "committed to fulfilling its business plan to bring world-class wireless broadband connectivity to millions of Americans."

LightSquared has been rumoured to be running low on cash for some time. It was reported late in 2011 that it was on track to run out of money by the second quarter of 2012 unless it was able to raise fresh capital. According to Reuters, LightSquared spent US$2.5 million on lobbyists last year, as it looked to make the FCC’s provisional approval to build the network permanent and counter its critics.

LightSquared this week delayed a US$56 million payment it owed to British satellite company Inmarsat for a spectrum transfer deal. LightSquared said it had “raised several matters that require resolution” before the payment would be made, as allowed by the terms of the agreement between the companies.

However, it was also reported that US operator Sprint may need to return US$65 million to LightSquared if the network is blocked after payments were made last year as part of a 15-year agreement to share network build-out costs and spectrum.

LightSquared is heavily backed by hedge fund manager Philip Falcone’s Harbinger Capital Partners, which has invested more than 60 percent of its assets in LightSquared. As the company’s biggest equity owner, Falcone has ruled out the possibility of the company seeking bankruptcy.