What's a little synergy without sin?

The Washington Post is reporting that 80 Washington, D.C.-based XM employees have been let go this week, clearing the way for cost savings that may eventually transform satellite radio behemoth Sirius XM Radio (NASDAQ:SIRI) into a cash-flow positive giant.

It doesn't end with just a few dozen dismissals, of course. The real savings will come as the company more effectively services its now 18.6 million combined subscriber base, takes advantage of opportunities to lower programming costs, and can spend money marketing satellite radio as a platform (instead of two rival services).

With shrinking operations to expand profitability on the one hand, the company is set to expand its share count to ultimately shrink it later on the other.

The company filed plans for December's annual shareholder meeting with the SEC last night, gearing up to ask investors to approve the widening of its authorized shares (from 4.5 billion to 8 billion) as well as an eventual reverse split.

Beefing up the authorized share count is not in response to an outside takeover. The company simply wants the flexibility to dole out more shares. It would be dilutive, naturally, but it's one way for the company to buy its way out of three hefty debt repayments that are due next year.

As for the reverse stock split, I think we all saw this coming. The stock hasn't traded above $1 since mid-September, so a Nasdaq delisting notice is coming. After 30 trading days below the buck mark, the exchange threatens to boot a stock if the share price isn't brought back up within the next six months. A reverse split solves that, if the company can't work its way back up on its own.

Several companies, including Priceline.com (NASDAQ:PCLN), JDS Uniphase (NASDAQ:JDSU), and most recently Sun Microsystems (NASDAQ:JAVA), have survived reverse splits.

Sirius also isn't the only radio stock trading for pocket change. Terrestrial broadcasters like Citadel Broadcasting (NYSE:CDL), Emmis Communications (NASDAQ:EMMS), and Regent (NASDAQ:RGCI) have all broken the buck in the market downturn.

Considering the shrinking headcount -- and eventually the shrinking share count, post-reverse -- Sirius XM is simply taking steps backward to take a larger step forward in the future.

More news than static on Sirius XM:

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