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.

[Jerrybob]

My premise is this: America is fast becoming a third-world country.

The economy is bad – few would disagree. My question is: What is going to lead us out of this bad economy?

In years gone by, we had a viable steel industry – no more; in years gone by, we had a viable garment industry – no more; in years gone by, we had a viable auto industry – no more; in years gone by, we had a viable furniture industry – no more; in years gone by, we had industry of all kinds – no more. All of these industries can now be found alive and well overseas and south of the border.

But “there’s always government” people said – if you want a secure job, government will always be a big employer of people – and even this is no more. The latest issue of Newsweek lists the state governments with all their layoffs; and a recent item in business news tells us that many tech jobs are now going to India.

So my questions are: How are Americans supposed to put groceries on their tables? Are we all supposed to go down the the local Wal-Mart and work for $6.50 an hour? And what is supposed to lead us out of this bad economy?

I think we are well on our way toward becoming a third-world country.

I hope I’m wrong.

[ninenot]

History helps.

The ChiComs made their most significant gains, both against the US Economy AND in military spying/dual-use technology acquisition, during the Clinton Administration (if you don't count Truman's giving up on Chiang Kai-Shek...)

The economic dislocation currently in play, due to the ChiCom plan against the USA, may well cause the Bush Administration to fall in the 2004 election.

Now, is the fact that Hillary could run "just a co-incidence?"

[Fury]

What are Americans going to do? What do you tell a young kid to

Hands on stuff. Skilled trade. Get training in designing and installing telecommunications distribution systems. Learn how to terminate fiber, to build and design a system. That ain't happening from overseas and boilerplate only goes so far...

[Fury]

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.

Eh, it's not the same as in person. Also, we need good tech writers. I have seen so much bad documentation with not just software and hardware IT products, but consumer products. Learn English (know what a direct and indirect object mean) and apply clear, cogent instructions and put them on paper. I know people who do very well with that.

[RJS1950]

Your post and post #72 hit the nail on the head. The jobs going out of country are the middle class, the very set of citizens these companies doing the off-shoring depend on to buy their products. If the middle classes decline drastically, then the corporate weasels doing the off-shoring had better hope they can convince the third world employees and citizens to buy their products, because there will be few middle class americans to buy them. The jobs going to illegals aren't just the $8 jobs, this stretches to the $10, 15, 20 and up jobs and especially in the building and skilled trades as well as truck drivers etc. The middle class fuels the economy and if they kill them off, their vast markets in this country will dry up.

[ninenot]

You reference an interesting historical shift.

I submit that the burden of taxes and regulation imposed on the American people and corporate entities since 1955 (just to pick a year) has increased by such an amount that it is, in and of itself, a major factor in the recession.

Taxes are approximately 300% of 1955 rates (gauged by Tax Freedom Day) and regulation costs now take up another 30% of corporate income (or expense, if you will.)

In the mid-to-late 1950's, a factory worker could support a wife and several children in a modest home, and still save for a rainy day. No more.

[harpseal]

Even if the actual risk factor etc. is taken into consideration it's cheaper to do work in other countries because over here, the laws and lawyers sue companies to the ground and the insurance premiums to cover that costs a bit.

Clearly we also need to work for torty reform lower taxes and less regulation but that does nothing to change the need for tariffs.

A tariff on all the companies would reduce the number of companies, reducing the number of jobs and this would be a greater impact than the jobs lost in this case.

A tariff is a duty laid upon an imort not a a domestic company. If company wishes to purchase a product in the uSA there is no tariff. Please understand that tariffs similar in function to a sales tax they are a tax on the consumption of products produced in other nations. They are voluntarily paid in the sense that no one forces anyone to buy an offshore product.

Sprint's (and other co's) shares would fall because shareholders reward a company for layoffs, and penalize them if they don't squeeze the employees.By this definition then if a company went out of business by laying off everyone theuir share prices would rise incredibly. Would you please at least try to make some basic sense.

[Myrddin]

I like Arnold, but he had something else to say that I didn't like. He is concerned about businesses leaving California and the loss of the tax base. Why? Because we need those taxes to pay for programs to help the people. Arnold doesn't get it either. He is happy to see mountains of taxpayer money spent on social programs. His only lament is that the cash cows that would fund it via taxation are leaving.

[superloser]

how many jobs or companies in the U.S. are you willing to sacrifice to protect Sprint jobs in the U.S?

How much of your income are you willing to sacrifice in taxes to protect Sprint's ability to offshore jobs?

Face it, when none of your neighbors are employed, on the ballot will be the fate of your wallet. Hillary would be happy to send an armed, jack-booted IRS stormtrooper to your house to collect the 90% that you'll be owing at that point.

THAT is reality, and it is one that most of the so-called "free trade" crowd refuses to see despite it being pointed out to them time and time again.

[ARCADIA]

I think we are well on our way toward becoming a third-world country.

No, actually we are on our way to a civil war. Because, unlike real third world countries, the cost of living in the USA continues to increase, along with expectations. So the population is getting squeezed from both sides. As soon as the last of the equity gets milked (that window has closed already) and people start having problems keeping a roof over their heads, or getting food, all hell is going to break loose.

People are going to start taking what they need by force, and civil order is going to be history.

[harpseal]

harp, I disagree with you on the same argument you dish out tiem and again, 'tariffs worked then and can do so now'. Well, they won't work now because times are different, circumstances are different, WE are different. if you mean the 1800s then we were developing and moving west and getting boatloads of immigrants. We're a superpower now, heck no, we're THE HYPERPOWER and we can't shut the door on the world because, the world is the US's backyard. WE straddle the earth like no nation before so we can't go into isolation because that would kill ourselves. And it would close our eyes to the real dangers posed by reverts to the Dark Ages (alQ).

You disagee fine. Do you have any evidence to support that tariffs do not would caus euis to go into isolation? So we are supposed to subsidize a nation that has within the time of the current administration threatened to destroy American cities with nuclear weapons? How long can we remain a credible "Hyperpower" "Super Power" or even a major power if we have unemployment continuing to rise and under employment continuing to rise. Whgat do we do about the fact that our recent engineering and IT ggraduates are unemployable becuase of business decisions based not upon the Free Market but government subsidies by foreign nations leaving no viable market for any skill but flipping burgers.

Oh and do not count on that job at McDonalds or Wal Mart the cascade effect of this situation has yet to really hit.

Now do you have any evidence for when this change in human nature and economic priciples occurred? I was unaware of the exact change. Can you further define that change you refer to? Or are you just going to make an unsupported statement.

[harpseal]

Eh, it's not the same as in person. Also, we need good tech writers. I have seen so much bad documentation with not just software and hardware IT products, but consumer products. Learn English (know what a direct and indirect object mean) and apply clear, cogent instructions and put them on paper. I know people who do very well with that. Teachers and tech writers arre in the USA on H1-B visas.

[Fury]

I've probably read some of their handiwork in some recent documentation I've reviewed. I believe in many cases, it takes someone who has grown up in a society to explain how to use certain products. Sometimes, the different cultures clash when attempting to communicate, as *how* they do the communicating is the key.

A good example is Tech Support. The accent of some engineers is so difficult to understand that I've had to on occasion ask to speak to another engineer and I've given the reason as "I can't understand what you are saying because your accent is so pronounced".

[harpseal]

I'm sorry, I now see where you got on the citizenship-thing. I meant to say, how many jobs or companies in the U.S. are you willing to sacrifice to protect Sprint jobs in the U.S?

so I say institute a tariff which has proven over 200 years to produce jobs in the USA. do you really think that phone service will not be available if we no longer have Indian or Chinese IT. the market for these products is in America. I further would like to see that nay tariff is balanced by a reduction in some income or payrill taxes. My personal prefernce is in the corporate income tax, but one loses the benefit of increased tariffs if it is just more money to the government. I would not be averse to most of the funding of the Federal government being from duties imposts and excise taxes.

Now I also believe the uSA should not be suject to any intertnational organization that may direct it to impose certain policies.

[DoctorMichael]

Getting scary, folks.

[bk1000]

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

I was referring to times when you call a company for customer service. As far as telemarketing goes, I tend to ignore them myself unless I am feeling a bit michevious and start heavy breathing, or ask them (if female) what they are wearing, etc. Can't stop them, might as well have a little fun!

[Paul Ross]

Much in the same manner as "sports automobiles, apples and oranges" being basically the same thing.

LOL! Best humor of the day! Great jab!

[harpseal]

You asked how many US jobs I am willing to sacrifice to protect Sprint jobs. The clear and concise answer is none. Tariffs as I stated before in and of themselves without them being an overall tax increase are a stimulus to jobs in the nation imposing them They stimulate groiwth and investment. I have absolutely no problem with technical innovation eliminating jobs as that increases productivity which means that an american worker. productivity is the jkey to the USA being able to mainbtain its standard of living in this world. the problem is we have nations subsidizing their products and imposing tariffs on American goods and services. We have nations using currency controls and authoritarian practices to artifically keep wages low.

Traiffs are a means of balancing out those government intrusions into what is within the USA a relatively Free Market. Tariffs greatest value is as a bargaining chip to stop the practices by other nation states that do not really subscrivbe to Free Markets and to get us past tempory dislocations caused by what are temporarily depressed standards of living in some of these nations.

They have a historical track record of working. "Free Trade" does not. The quotation marks are to denote that "Free Trade has nbever been implememted.

There is also a question of "Free Trade" in societies that are not free societies. China has some aspects of a capitalist free market but it still has many aspects of a command economy internally. Can we engage in Free Trade with such a society is it beneficial to anyone except teh command structure of the PRC?

These are serious questions and they need to be addressed.

Likewise there are questions with India regarding currency controls and the Caste system. admittedly there are a whole lot less with India and the actual savings by relocating IT to India are not always as great as projected internally. I note Verizon is now returning a number of IT functions to the USA having found the Indian experiment not to be cost effective for them.

An Indian programmer who is making $5,000 /yr is not as productive in producing software for an American company that does the job. It may take two three or four such programmers and teh time differential with the USA and the communication probelm can all take a toll. But when subsidized by OPIC and other government programs it makes sense to try this for some corporate executives.

A tariff balances this out. a tariff keeps a strategic industry within the USA. One of the biggest factors in the US victory in Iraq was American military IT at least according to the Chinese military. This is direct translation from the civilian IT infrastructure. The Chinese are focusing a great deal of teh future investment in their military on upgrading their IT. If we as a nation do not maintain a strong civilian IT infrastructure then iourlead in that area will not only evaporate but we may find ourselves behind with no way to catch up. Our military at present does not use leading edge IT technology. But at present our military IT technology is yyears ahead of second place.

Yet another reason for such a tariff.

[Paul Ross]

Ping

[harpseal]

I've probably read some of their handiwork in some recent documentation I've reviewed. I believe in many cases, it takes someone who has grown up in a society to explain how to use certain products. Sometimes, the different cultures clash when attempting to communicate, as *how* they do the communicating is the key.

Most people think the primary job of the programmer is pushing bits. The primary job of the programmer is understanding what the program is supposed to do and making it do that.

The actual code is usually the simplest part of the job.

A good example is Tech Support. The accent of some engineers is so difficult to understand that I've had to on occasion ask to speak to another engineer and I've given the reason as "I can't understand what you are saying because your accent is so pronounced".

If you as a user can not understand tech support that person you can not understand is effectively useless and not at all productive.