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.

[Cronos]

To slap down tariffs or some of the other suggestions put forth here don't make sense to me, they'd be something only chicoms or rats (same difference) would think up. Dubya's tax cuts make more sense to me, plus some American ingenuity would see us out of this clintack created recession and on to renewed prosperity. The other option would make us a commie state and that definitely ain't a good thing

[VadeRetro]

One thing I tend to do,albeit a bit rude, is refuse to talk to phone people who speak with a heavy accent.

I'm already blowing off all my junk calls, so to discriminate I'd have to start listening to more than I do now.

[1rudeboy]

Again, I know nothing of the Harley-Davidson/China situation, but I can assure you that HD will not find relief in the Chinese court-system.

[Cronos]

More realistically, would anything made in the US have substantial sales in China when the yuan is kept at an artificial low. What is the actual PPP there? Or burgernomic value would do. Wait, I'll google it up.

[Cronos]

Ok, got it, 1$ = 5.4 yuan in 2002, PPP so say about 3yuan today?

[Myrddin]

I just received a mailed brochure from the Gartner group. They are pimping an application development conference that is focused on helping U.S. companies to offshore work. I wrote them a scathing letter. Why would I pay $1595 to attend their conference? It is aimed at furthering a process that would leave me and other U.S. IT professionals unemployed. I suggested that they relocate the conference to Bangalore or Hyderabad and drop the free to $150. People in India that make $6,000 per year are not going to spend 1/3 of their gross annual income on a conference...not to mention travel costs to Los Angeles (airfare, hotel, food). A U.S. IT employee isn't going to waste savings or severance check on attending a conference whose objective is to offshore his or her job.

[Cronos]

Check this out : http://www.ingraminvesting.com/docs/bigmac.PDF

The yuan is the most undervalued currency and the Swiss franc the most overvalued with the yuan yuan is overvalued by 56% against the dollar. Strangely enough the Australian dollar is also 31% below the PPP against the American.

[StolarStorm]

If I had to come up with a plan to cripple a nation before entering into a war with it, I couldn't do a better job than what is happening now.

1. Flood their markets with cheap goods thus eroding their manufacturing base.

2. Destroy their intellectual capital by outsourcing professional services.

3. Make what manufacturing they have dependent on you for critical components.

4. Cause societal unrest by encouraging unemployment among the capable segments of society.

5. Buy control of the panama canal so that you can shut it down at will.

6. Bribe politicians so they ignore what is clearly going on.

7. Use their own ideals against them (screaming free trade while protecting your own).

Is this what they meant by asymmetrical warfare?

[StolarStorm]

Those tax cuts are going right into chicom bank accounts. What do you think the average family is going to buy with those absurd payouts for breeding (child credit)? It's not going to be made here.... I bet. I'd rather see tax cuts that encourage investment in the USA and some lessening of the regulatory burden on corps located here.

[ninenot]

Sorry--Google Patrick J Buchanan. Name of the place is akin to "American Cause." They have an email link...

[VadeRetro]

Know what's funny? There's this other thread going on the latest GDP uptick and the pollyannas are yelling that Bush is saved and the Dems are toast. It's the night-and-day opposite of the discussion on this one.

I hope they're right, over there, but I don't see where the fundamentals of the situation have altered one iota.

[ninenot]

You mind explaining that rant?

Our position as the super-power does not make us subservient to other nations, insofar as we are not a Church.

Utilization of the powers of the Federal Government for promotion of the Common Good was traditionally thought to refer to the Common Good of US Citizens, not some poor wretches in Bangladesh.

[samuel_adams_us]

I just fed my PCS phone to my dog, he found a great place to bury it. No more sprint for me and my family, looking for a new american carrier, regardless of the cost. I would rather feed my neighbor than some terrorist in a foreign country.

[ninenot]

You'll find the use of that name if you read my posts on the Religion (RC) threads.

[ninenot]

representing the interests of THEIR country rather than the USA

Hell--high-level officers of the State Department represent other nations' interests better than those of the USA.

Maybe this benighted clod is the head of the China Desk at Foggy Bottom.

[LibertyAndJusticeForAll]

It isn't just about job creation, it is also about national security.

“We need to reexamine how our trade policies have negatively affected our economy while boosting the economies of other nations.
We can no longer sustain a free-trade policy that does not insist on reciprocal, mutual benefits to both our economy and those of our trading partners. Globalization at any price is proving to be too high a price for this nation to pay.”
http://www.freerepublic.com/focus/f-news/955238/posts

American jobs must not be lost, says Kissinger
http://www.freerepublic.com/focus/f-news/947266/posts

Notes for Free Traders
"Adam Smith's argument for free trade is an argument against self-sufficiency in all goods and services. It is not an argument for exporting a country's productive capability to countries with the lowest labor costs."
http://www.newsmax.com/archives/articles/2003/3/6/153559.shtml

[ninenot]

Let me help, for the sake of the unknowing: 1rudeboy is what we in Wisconsin call an F.I.B. The last two letters stand for Illinois Bozo.

[ninenot]

HD did not prevail in the ChiCom courts.

That's why they (somewhat undiplomatically) handed Evans the letter while he was their guest at the Milwaukee plant.

But if you look at www.samnow.org, you will see a large cross-section of small manufacturing enterprises which are much more concerned about this stuff than Harley--these are people whose entire livelihoods are going away.

[Myrddin]

Tell him to go into the trades, or medicine, or teaching

The trades depend on people who have money to spend to do new construction, remodeling or repair. Unemployed people don't do those things. Governments tend to defer that kind of spending when tax revenues decrease (because unemployed people don't pay taxes).

Medicine? Why spend $50,000 to $100,000 on pursuing a medical degree when you will have to pay $90,000 to $120,000 per year to the malpractice insurance companies to work in your field (not to mention repaying your school loans, home mortgage, food, clothing, etc). You would have to be a real masochist to follow that direction in today's environment.

Teaching can be outsourced. Just turn on a TV in any college town. You will find some channel dedicated to teaching a few selected classes for the local college. It is tougher to do this with K-12 because the students lack maturity and self-discipline. That might answer why our school systems are performing so poorly. The teachers are every bit as undisciplined as the kids they are supposed to teach.

Law enforcement and fire fighting are two fields that can't be effectively sent offshore. Both are inherently dangerous and neither pays very well.

In my home, we have two different lines of employment. My wife dispatches for the police and fire departments. I work in the IT field. My income is 5X more than what my wife makes. The marriage penalty is enormous. We tolerate it because her income alone would keep us afloat if my current employment evaporates.

If one of the bright, unemployed IT types here is willing to learn the dispatch business and relocate to southeast Idaho, we have two positions open. It takes someone who can conduct a mental 3 ring circus, speaks clear English, can pass a background security test and has good common sense in the area of officer safety. The last two candidates flopped after 6 to 15 weeks of training. Send me FReep mail if interested.

[ninenot]

Estmates range from 20 to 30% under-valued (yuan) and kept there by the ChiComs.