Sprint plans to send hundreds of technology jobs overseas

Kansas City Star ^ | 8/7/03 | Suzanne King

[Non-Sequitur]

Hundreds of Sprint Corp. employees may lose their jobs as the Overland Park-based telecommunications giant moves forward with a plan to send certain technology jobs overseas.

Sprint chairman and chief executive Gary Forsee on Wednesday said competitive pressures had forced the company toward "offshoring" -- the growing trend of U.S. companies relying on lower-paid computer programmers as far away as India and China.

Sprint put out a request for proposals from outsourcing companies earlier this year and has since narrowed the list to two offshore vendors. Forsee said Sprint is conducting site surveys and is in "serious discussions" with the two companies.

"At the end of the day, it's several hundred jobs that could be impacted," Forsee said. "But we don't know what the ultimate result is."

A final decision on how to handle sending the jobs overseas is likely within 60 days.

Layoffs would not be immediate, Forsee said, because moving work to the outsourcing companies could take six to 12 months.

Forsee also said the company hopes to ease the impact of sending jobs overseas by moving some displaced workers to other information technology projects within Sprint and replacing existing contractors with Sprint employees.

Sprint already was considering moving jobs overseas when Forsee replaced William T. Esrey as the company's top executive earlier this year. But Forsee said he made the final decision to go ahead with the request for proposals.

Sprint already uses an offshore company for some customer service jobs. The company has outsourced information technology jobs to U.S. firms for years. But it has resisted sending information technology jobs overseas.

That has changed as Sprint, like other telecommunications companies, struggles with weak sales in what continues to be a difficult economy.

For almost two years, Sprint has been on a campaign to lower costs to compensate for soft sales. Since October 2001, more than 18,000 jobs have been eliminated. Hundreds of contractors also have lost work at Sprint.

Computer programmers and other skilled technology workers have been among the hardest hit, and there remains a severe shortage of available technology jobs in Kansas City and elsewhere.

Sprint's move toward sending jobs overseas will make a bad situation worse, said Rick Kumar, a former Sprint contractor who last year founded a support group for laid off information technology workers.

"The market is where it was a year and a half ago," Kumar said.

Many people still are out of work or have abandoned their information technology careers for other work, Kumar said. But unlike many of his information technology colleagues, Kumar said he does not blame Sprint and the many other companies that have turned to cheaper labor overseas.

"They have to follow the model or go out of business," Kumar said.

That is precisely how Sprint explains its move toward an offshore vendor. When competitors began cutting information technology costs by turning to offshore programmers, company officials said, Sprint was forced to look at following suit.

"We've got to stay on top of our competitive position," Forsee said. Offshoring "has become a significant trend that we hadn't participated in, so we looked at that as a strategy that was important...because of the competitive aspects."

IBM, Microsoft and HP are among the U.S. companies that are sending information technology jobs overseas or reportedly plan to start. Sprint must lower its cost to keep pace, Forsee said. But he knows careers are at stake.

"When you take actions like that, you're doing that hoping to keep the company as a whole strong," realizing that there are "people and careers and jobs at stake," Forsee said. "We try to do that part very carefully. It's not without significant consideration."

Shares of FON closed Wednesday at $14.05, up 1 cent. PCS closed at $5.41, down 36 cents.

[harpseal]

Tell you what wehy don't you try for a change to just look at facts. Yoiu want to defend the WTO and Chinses tariffs of 50% on Americna consumer products. Do so. But At this point I shall simply state go to the WTO web site and look it up. Use a search engine to do your own decision research. Clearly Harley is till not selling in China. they have captured one fifth of the global market and that is without being able to sell in China. there are several threads on Free Republic documenting this. You also have threads documenting how the WTO is ruling consistently against the USA.

Now would you please defend the Tienamin square massacre since you are such a fan of the current Chinese government. How about the market in body parts for transplant?

Now would you answer the simple question are you an American or are you Chinese?

[Sabertooth]

That would be a growing problem just from the pace of technological change. If tech change were the only problem, retraining would be the answer.

When cheap international labor is the problem, retraining isn't the answer. Retrain to what?

And who does the "retraining?"

In any case, periodic retrainings because the uncertainties of the global economy leave American workers vulnerable to a paper shuffle between, say, Belgium and Hong Kong, are not suitable for all Americans. Folks raising families need a higher (though not absolute) level of security than that. Unexpected retraining that is necessitated by the economic caprices of elites not loyal to the United States is not a healthy trend for domestic tranquility among the American populace.

[riri]

only a few rich exist and prices of items go way up to cover for the profit margins and we're suddenly living in an oligarchy, or (3) a revolution happens and we're communist

The point that can not be ignored is that the larger the pool of disgruntled, "poor" citizens become--as long as they are allowed "one man, one vote" the MORE LIKELY it is that communist and socialist or even nationalistic movements will gain strength. It is the way it has always been and will always be.

[Nataku X]

You're approaching this backwards. It's not that the prices will rise if they hire Americans, it's that the prices won't fall if they replace Americans with Indians at a tiny fraction of the cost. They are looking to increase their profit margin for their stockholders. That's all.

Many grocery stores are implementing self-service checkout counters. Three out of four cashiers are laid off in those instances. Do the prices in the store fall? No.

Sprint isn't losing money on hiring Americans, they're gaining more money by hiring Indians. "People don't get rich by writing checks." Your dilemma is a false one.

Companies, of course, should have less taxes and fewer EPA regulations and the like, but they *will* hire 12-year-olds to work for 12 hours a day for pennies (and they did in the late 1800s!). Would you rather that we go back to those times?

Whether we want to admit it or not, the government does have a place in protecting the public from harm--whether it be by defeating Saddam, or by stopping H1-Bs, or putting tariffs or other incentives in place.

[Sabertooth]

If this is such a good idea why don't they absorb the risk themselves or pay for private insurance. I note there are no private insurers offering such coverage at a rate that would make such investments feasable becuase of the high risk involved.

Free trade! *cough, cough* Co- *cough* porate welfare! *cough*

[harpseal]

Investment would increase? Like in Venezuela?Look at American History and you will see that protective tariffs do work and have worked. When and if you provide some evidence to the contray I will be happy to discuss civbily any evidence you present but snide questions like this get only the resonse appropriate to a traitor to the USA. as I said, however, I will be more tahn happy to withdraw the traitor comment when you admit to being of some nationality other than American or you enter iunto rational discussion.

[1rudeboy]

Now would you care to cite an example where the WTO has ruled in favor of the USA in a dispute with Europe, China or India?

Now I will care, although I'd appreciate you do the same concerning Harley-Davidson. Looks like the WTO hasn't ruled in favor of the U.S. over India since June.

U.S. Wins WTO Ruling on India Challenge to Textile Rules

[AdamSelene235]

Funny, the founders of the united States chose tariffs, aka "protectionism".

Yes, and that issue combined with the issue of slavery nearly destroyed the United States.

[AdamSelene235]

if you care to merely use this forum to advance your religous belief in the current trade envirornment which is only called Free Trade by those who have a lack of knowledge about the cuurrent trade envirornment expect to be completely refuted with facts not fairy stories or lies like most Free Traders put forth.

Obviously we are about as far from free trade as you can get.

[Nataku X]

Exactly... to foolishly hold onto lassiez-faire capitalism will lead us into socialism or communism. Look at Dean, Gephardt, etc... they are the only candidates addressing this problem, and they're hard-core socialists.

Not to mention that much of this outsourcing & H1-B importation & illegal immigration is being *funded* with our tax money in many instances. If Bush does not address this, then we will be a socialist nation starting 2004. Happy thoughts, eh?

[Poohbah]

Very well said. The influence of OPIC which uses the full faith and credit to subsidize overseas investment must also be considered in all these discussions. The companies investing in offshore provision of goods and service will be reimbursed by the Americna taxpayer if they lose their investment due to currency manipulations or political risk (nationalization, war etc.) If this is such a good idea why don't they absorb the risk themselves or pay for private insurance. I note there are no private insurers offering such coverage at a rate that would make such investments feasable becuase of the high risk involved.

OPIC massively undercuts private insurers, as do all government-subsidized businesses.

With OPIC out of the picture, there will be a competitive market for this insurance, and you're going to still have substantial offshoring.

[UnBlinkingEye]

If the individual companies are being forced by the competition to eliminate American jobs, maybe the correct answer is to level the playing field by restoring the properly calibrated tariffs (and maybe reducing payroll tax in exchange)?

Hurray!

How about eliminating OPIC, H1B and L1 programs at the same time?

[harpseal]

OPIC massively undercuts private insurers, as do all government-subsidized businesses.

With OPIC out of the picture, there will be a competitive market for this insurance, and you're going to still have substantial offshoring.

If a private market evolves for such insurance so be it. I have no objections becuase the part I object to is the government subsidy. Since you freely admit that the rates are amssively undercut then you also realize that having to pay for this insurance privately will increase the costs of offshoring. alternatively the companies will invest without such insurance therby assuming the risks themsleves. Of course the decision to make such investment might thebe altered by having to assume that risk. I am not seeking an end to all offshore investment as clearly some of it is reaonably justifiable.

[harpseal]

Obviously we are about as far from free trade as you can get.

You at least get that point.

[Iscool]

Lotsa folks are waking up to G Bush...And although we wouldn't vote for a Democrat, I suspect we will get one by default...If people get so fed up as to stay home on election day, we'll get another clinton...

Some say that George has got us conservatives so wrapped up in the flag due to 911 and the wars that we are blinded by what's going on domestically...I'm beginning to think there's some truth to that...

[scottlang]

I fear you are right.

[oceanview]

good post. you should post this sentiment often on all of the offshroing threads running around, we need more help to combat the freeper "free trade at all costs even if it means the US middle class implodes" crowd.

[Elliott Jackalope]

Engineers are barred from serving in public office. Not by any law, but by their personalities and temperments. Engineers like to solve problems, and they don't take kindly to those who throw artificial barriers in the way of solving those problems. The lawyers who currently infest our political system have zero interest in actually solving ANY problem, their interest is in creating as many barriers and problems and hassles as possible in their every activity.

Please, don't try to encourage engineers to run for public office. The end result would be a lot of engineers who become walking nervous breakdowns, and the lawyers who currently run our country would just become even more annoyed at the rest of us, which would result in even more bad laws being rammed down our collective throats.

If, however, you come up with a method of ridding our government of lawyers, then you could use engineers to fix the tottering remains of whatever is left after centuries of lawyers misrule. But first you have to excise the cancer.

[dfwgator]

Sprint just lost me as a customer.

The company you end up switching to probably outsources to India as well.

[Dr Warmoose]

Yes, and that issue combined with the issue of slavery nearly destroyed the United States.

So you say.

I am suspicous of your motives because you applied the debate technique of introducing a Red Herring - that of slavery. Since slavery is allegedly a bad thing, tossing that in along with "tariffs" is supposed to also taint something totally irrelevant to slavery.

That's dishonest particularly when the burden of proof is on you to show that tariffs, compared to say, an income tax or property tax is a bad thing.

Bermuda gets along quite well on high tariffs.