Sprint plans to send hundreds of technology jobs overseas

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.

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.

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.

I should have thought that our gigantically lopsided Trade Deficit would have sufficed. Here are some extracts with links to provide you with some examples:

"The U.S.-China Security Review Commission also looked at Chinese economic development as a strategic weapon. America's huge trade deficit with China is unlikely to ease and instead will get worse as China continues to break the promises it made in order to enter the World Trade Organization (WTO). No longer a producer of toys, Chinese economic expansion is on the verge of cornering the market in several critical segments, especially computer technology. According to the study, "the increasing transfers of U.S. research and manufacturing facilities to China could have a negative impact on the strength of our technological and industrial base as well as the relative military strengths of the two countries," and could "undermine the U.S. defense industrial base."
Indeed, both Microsoft and Intel recently signed huge deals to build cutting-edge facilities in China to develop and produce advanced generation computer technology. Microsoft and Intel won't really own these plants. The Chinese government will. Beijing will have the final say on what gets produced and whether the plants remain operating under joint-venture auspices. This grants the Communist leadership in Beijing incredible leverage over multinationals, leverage that can be, and has been, translated into intense lobbying to appease China on a variety of issues.
China is already breaking its WTO promises barely after the ink has dried on the pages. In the wake of Chinese foot-dragging on allowing imports of U.S. corn, wheat, cotton, rice, vegetable oil, pork, beef, poultry and computer chips, among other things, chief U.S. negotiator Allen Johnson was recently reduced to stating the obvious: "There's a growing concern over implementation of China's WTO obligations." In fact, China may have no intention of abiding by many of its WTO obligations. Beijing has progressed quite nicely for years by promising Washington to abide by weapons export agreements, only to break them time and again without penalty, so why shouldn't China be able to pull the same trick on WTO? By the time America wakes up to the fact that it has been bamboozled, China will have the world's most rapidly advancing economy, will be able to hold trillions of dollars of U.S. investment hostage, and won't really care what America thinks. The long-term strategic impact of rebasing U.S. technology development capability inside China has yet to be appreciated by those rushing to invest in China."
http://www.jamestown.org/pubs/view/cwe_002_016_003.htm

"This hostility is finding expression in actions as well as words. During the last week of June, the World Trade Organization ruled for the EU against the United States in a case that will hurt Microsoft, General Electric and Boeing. Americans can expect more economic aggression from the EU as sovereignty flows from national capitals into the hands of EU rulers."
http://www.townhall.com/columnists/paulcraigroberts/printpcr20010705.shtml

“That would be less than a quarter of the $4bn sanctions the EU wants to impose in retaliation for US tax breaks which were deemed by the WTO as illegal export subsidies.
This amount would be excessive since the US tax breaks would not have caused such severe damage to EU trade interests, the US said in a filing to the WTO.“
http://news.bbc.co.uk/2/hi/business/1821231.stm

"In an op-ed in the Wall Street Journal March 3, EU Trade Minister Pascal Lamy assailed the United States for not immediately complying with a series of judgements brought against it at the World Trade Organization."
http://www.tradealert.org/view_art.asp?Prod_ID=779

“So there was more than a whiff of hypocrisy in the EU's recent notification to the World Trade Organization that it may impose sanctions on U.S. products including steel, textiles, and fruit.”
http://www.nationalreview.com/comment/comment-hawkins052302.asp

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