SK Telecom (NYSE: SKM) has decided not to form a joint venture or collaborate on business projects with Sprint Nextel, according to Reuters, which referenced a report in the Yonhap News. Sprint rejected a $5 billion investment by SK and a group of private equity firms in 2007, but rumors kept resurfacing that SK Telecom was interested in buying or investing in Sprint (NYSE: S). In July, sources said the talks switched to collaborating on technology. “We have considered several business tie-ups with Sprint Nextel, including a joint venture,” South Korea’s Yonhap quoted an unnamed SK official as saying. “But the merit of business cooperation has disappeared as market conditions at home and abroad have weakened and as the economic downturn is set to linger.”

This news surfaces the same day as Sprint Nextel moves to trim an unspecified number of employees. The company offered a voluntary buyout package to most of its 57,000 employees that don’t interact with customers, according to the Kansas City Star. The need for a smaller workforce may have less to do with the dealing falling apart with SK Telecom, and more with the company’s third-quarter results reported last week, which showed a loss of 1.3 million customers and $326 million. Since Friday, Sprint shares have tumbled 42 percent, and closed yesterday at $1.95 a share. In afternoon trading, the company’s stock had already risen 25 cents, or nearly 13 percent, to trade around $2.21.