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]

If instead of your thought experiments you engaged in dealin with reality you miht be able to engage in resonable discussion.

[AdamSelene235]

If instead of your thought experiments you engaged in dealin with reality

Ask the folks who lost their jobs at the LifeSaver's factory about the reality of my example.

[Myrddin]

I have no desire to destroy telecommunications. Further offshoring of other than IT is really not affected.

Everything is driven by cheap telecomm connectivity. Remotely reading an MRI. Call centers. Legal services. Tax preparation. Pick any industry that has been sent offshore and I'll bet you can find a cheap telecomm link to the U.S. that is keeping it viable.

I'm not advocating massive telecomm regulation. We just need to remove the unfair competitive advantage of cheap telecomm links to offshore providers whose cost of living is 10% of that in the U.S. Increasing the cost of the telecomm part of the budget will offset that massive disparity in cost of living.

[ZeitgeistSurfer]

Unfortunately, the reaming-out of the middle class knowledge workers - what someone on FR called "the middle class holocaust" will put the RATs back in power in 2008. This issue is just starting to heat up now. It won't be hot enough to make the difference in 2004, but just wait until it really starts to boil. I agree with those on FR who say that we must protect our intellectual infrastructure and the futures of the educated middle class against the targetted economic warfare of China, India, et al. Therefore, tariffs or their equivalent are required. However, what the RATs will do is not to implement these kinds of protections, but instead will be to massively increase the size of government to a magnitude that would make FDR or Lyndon Johnson blush. Training programs, "safety nets", family support, etc., etc. In other words, they will make it much worse. I have no hope for the pubbies. The people who control the GOP benefit too much from the current system and live in protected, gated communities.

[ninenot]

Only one small problem. Like it or not, the US Government must be paid for--even if it's only the Post Office and the military.

Bastiat regards tariffs as a violation of property. Logically, property taxation would fall into the same category, as would income taxation.

So--how does this tubercular French libertarian (not Christian, I emphasize) economist/polemicist propose to pay for the toys of the Army?

[ninenot]

Milwaukee Electric Tool is closing its Mississippi plants and moving them to Mexico, as well.

The steel tariff most likely was a wash. As you know, material cost for most manufactured product is about 60% (depending on how one does cost-loading.) Labor usually is around 20%, admin and "other" is the balance.

So you are telling me that reducing labor cost from 20% to say, 10% offsets the steel cost increase? Nope.

[ninenot]

Your argument is of the straw-man variety. APole suggests that a tariff which serves to offset the lack of regulation and taxes, plus the currency "fix", should be applied.

You then suggest migrating to a dictatorship. I would think you're a bit smarter than that.

[AdamSelene235]

The fairest system would be fee based. You only pay for what your use. The militia system is an elegant solution to the problem of the military. I doubt you would find a citizen militia defending the House of Saud and thereby provoking the slaughter of innocent Americans.

If the government limited itself to the defense of life, liberty and property (Not free medical care for Africa, free drugs for seniors, and Globo-Socialist Nation Building) the fiscal burden of government would be neglible.

[ninenot]

Well, Bastiat died.

The social contract implicit in our Gummint's tax-taking contains a provision referenced in the preamble to the Constitution: "...the common good..."

It ain't good if there are no taxpayers due to a war against them effectively waged by an acknowledged enemy, who is Red China.

[AdamSelene235]

So--how does this tubercular French libertarian (not Christian, I emphasize)

Yeah, Bastiat's a real atheist.

Life Is a Gift from God

We hold from God the gift which includes all others. This gift is life — physical, intellectual, and moral life.

But life cannot maintain itself alone. The Creator of life has entrusted us with the responsibility of preserving, developing, and perfecting it. In order that we may accomplish this, He has provided us with a collection of marvelous faculties. And He has put us in the midst of a variety of natural resources. By the application of our faculties to these natural resources we convert them into products, and use them. This process is necessary in order that life may run its appointed course.

Life, faculties, production — in other words, individuality, liberty, property — this is man. And in spite of the cunning of artful political leaders, these three gifts from God precede all human legislation, and are superior to it. Life, liberty, and property do not exist because men have made laws. On the contrary, it was the fact that life, liberty, and property existed beforehand that caused men to make laws in the first place.

What Is Law?

What, then, is law? It is the collective organization of the individual right to lawful defense.

[AdamSelene235]

You then suggest migrating to a dictatorship. I would think you're a bit smarter than that.

/sarcasm

[AdamSelene235]

The social contract implicit in our Gummint's tax-taking contains a provision referenced in the preamble to the Constitution: "...the common good..."

I can't recall signing such a contract. Could you please produce the document.

It ain't good if there are no taxpayers due to a war against them effectively waged by an acknowledged enemy, who is Red China.

Gee, maybe we shouldn't be selling them so much debt i.e. Mortgage Backed Securities and Treasuries. After we finish paying for free african health care, free drugs for seniors, US subsidies to Iraqi State controlled businesses, etc, etc....the Chinese will own the Boomer's children.

[harpseal]

Then, of course, they cry out for Big Daddy Government to save them from the terrifying coastline by gorging itself on the private transactions of it citizens.

In point of fact it those who argue for the abomination sometimes called Free Trade which is anythging but that who are sucking off teh government teat via OPIC and otehr programs but the religous fanatics who talk in parables that have no relationship to reality try to say black is white. Try reality it is there and does not go away uif you stop believing in it.

As Bastiat says, protectionism, socialism and communism are the same plant in different stages of growth.

Yeah right and to quote Laz "Sports cars, apples and oranges are the same thing." perhaps you should codify the wrinings of Batiat like the Islamics have codified teh writings of Mohammed. That way everyone who believes will be able to cite that as justification for actions which others find harmful. Hey it worked for Ussama and it would feed your ego.

[AdamSelene235]

perhaps you should codify the wrinings of Batiat like the Islamics have codified teh writings of Mohammed. That way everyone who believes will be able to cite that as justification for actions which others find harmful. Hey it worked for Ussama

Sports cars, apples and oranges

[chimera]

I'm frightened for my grandchildren,what's going to be here for them?

Beats me. I used to have this (nightmare) vision that the future US economy would consist of three job classes: trial lawyers, insurance salesmen, and burger flippers. The insurance salemen would sell liability insurance to the burger flippers who would sell burgers to the salesmen and lawyers, and the lawyers would sue them both. But that nightmare has been replaced because even that is a death spiral. Once the trial lawyers put the burger flippers and insurance salemen out of business, who is around to pay the lawyers' fees?

Government workers, I guess. But if there is no business around doing things that can be taxed, who supports the government? I guess they just print money and pay themselves. A government of regulators regulating the regulators.

I have tried in my own way to offer solutions to people in positions to do something, business and government people, etc. Its more of a plea, really. And that is, don't make stupid decisions that needlessly destroy the lives of our best and brightest. Sure, it might cost you a fraction of a percent or so in your company's quarterly profit statement to keep your in-house IT dept., intead of firing them and sending the jobs off to India, or manning the help desk in Bombay with Punjeeb Boobleeboobleedo instead of in Chicago by Bill Smith. But, dagnabbit, its a matter of the future of the country to keep our best and brightest employed here.

Likewise in the government sector. It might be politically attractive to pander to some extremist group and shutdown a worthwhile and productive research program or laboratory and throw a couple of dozen Ph.D.s out on the street with no job prospects, but for the sake of national security and our technological future, forego a few thousand votes bought with the lifeblood of our most technologically-capable citizens in the next election and keep those people around.

Unfortunately, when you've got leaders who look no further than the next election or the next quarterly profit statement, there is a disconnect between the value of long-range vision and short-term benefits.

[ninenot]

OK. YOU defend the USA with a citizen-militia. Presumably you have an adequate spot for parking your F-16 nearby your home. I can park a couple of tanks in my yard.

We're all set, then, right?

[ninenot]

You will note that I did NOT say Bastiat was atheist. He is, at least, a deist, based on your post. But that's not quite the same as a Christian.

[Myrddin]

Rather than getting a law passed, why not communicate your dissatisfaction with the offshore support? Tell the company in question that you are willing to pay for a U.S. based support person who is competent and speaks good English.

Another offshoring thread shared a story about a company that ran into a software defect related to the wcstombs() libary call. They were paying for 24X7 service and had been accustomed to a typical 2 hour turn around time. A problem submitted on Friday was not resolved until Thursday of the following week. Repeated calls for status updates were answered with "We're working on it". Not true. The Indian support staff didn't even see it until Monday morning. Once they did start working on it, it took days to finish. Not really a good return on pricey 24X7 support contracts. Frankly, it is fraud on the part of the company collecting the money for claimed 24X7 support. I'm sure the legal profession is quite willing to reduce the profitability of such fraudulent behavior.

[txhurl]

It won't be hot enough to make the difference in 2004

I think it will make a difference in 2004. It would have made a difference last year, if the future extent (and repercussions) of off-shoring had been known then.

This issue is gonna stick, and Bush needs to start 'jaw-boning', per someone on this thread, quickly.

If we're whining about it now, be sure that the rats will soon pick it up and run it back for 6.

[ARCADIA]

The fairest system would be fee based. You only pay for what your use.

Actually the fairest system would have you pay based on what you have. He who has the most property for the state to protect pays the most. This also encourages resources to be used rather then horded.

The next fairest would be based on what you earn. Just a flat percentage tax across the board with no deductions or exceptions. The cost of the state is allocated evenly across all the components of the GDP.

The Sales tax is probably the most complicated alternative to put in place. To be fair every transactiuon has to be invoiced and taxed. Including all services. This one would become a nightmare and probably lead to the development of biggest underground economy since prohibition.

If the concept of tariffs bother you then we can just as easily put in place an import prohibition, or a quantitative cap.