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Sprint plans to send hundreds of technology jobs overseas
Kansas City Star ^ | 8/7/03 | Suzanne King

Posted on 08/07/2003 5:25:07 AM PDT by 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.


TOPICS: Business/Economy
KEYWORDS: economy; offshoring; outsourcing; sprint; unemployment
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To: 1rudeboy
Let me work you through this: tariffs are a net cost to the domestic economy as domestic users are forced to cough-up the extra cash extracted by the tariff, as the "protected" industry itself raises its domestic prices by the percentage amount of the tariff. So the question remains: how many domestic jobs are worth the Sprint jobs you intend to save?

Let me work you through this: Why is Sprint relocating its jobs to foreign nations? Because it is cheaper for them to do that. If they had to factor the costs of tariffs into the equation, they may find that not moving the jobs overseas is their best option. If even after tariffs it is cheaper, then you still pay the same damned price but Sprint's profits are lower. The only reason Sprint would lower the prices of their products is to be more competitive, they don't realize a savings in India and automatically pass it to you unless the market forced them to do so.

Because you probably still don't get it, lets go a little further. The displaced IT worker is now not paying taxes, rather he/she is probably collecting entitlements which drain the treasury even faster than not putting anything in. Instead of collectivly paying a couple of million dollars to stay in this country and circulate around, some of those millions of dollars are gone. Part of it shows up as profits to stockholders, much of it is pissed away in foreign nations never to be seen here again.

321 posted on 08/07/2003 6:05:40 PM PDT by Dr Warmoose
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To: Non-Sequitur
Well, unless we simply want to trade in the red, white, and blue for competing multinational corporate logos, something has to be done.

The US Gov needs to do all it can to make investing in the American worker attractive and easy, to offset the temptations of cheap labor abroad. This can include reducing paperwork, removing threats of litigation, fixing the god-awful healthcare system, and eliminating barriers to hiring based on whoever does the job best, not whoever fits the quota best.

But in the short-term the US needs to remind employers that an investment in the US is an investment in themselves. I would offer a tax break per US citizen employed. If they help train that citizen as his/her career changes, give them more $$$. Conversely, if they hire outside the US when similar skilled help is available in country, they are penalized. It would encourage them to act more like farmers and less like a cloud of locusts swarming from field to field, leaving each one bare behind them.

Also, the US Government and state governments should pass laws refusing to sign contracts with companies that outsource. Gov is a big spender and such laws could speak volumes. But again, such laws must be offset by a genuine effort to make the US a labor-investment friendly place.

And if they still didn't want to play the game, if they wanted to leave the US rather than face these new laws, well then good riddance - short of threatening to nationalize them in the interest of national economic security, the only thing I can think of to do is to charge them an exit fee - you know, like your wireless plan charges you if you quit early. It'd have a nice irony to it, too.

322 posted on 08/07/2003 6:06:43 PM PDT by Puddleglum
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To: AdamSelene235
Pay for what you use....

So the policy will be to tax the bejabbers out of families and not singles/DINC types.

That's a good recipe for the end of the country.
323 posted on 08/07/2003 6:07:00 PM PDT by ninenot (Torquemada: Due for Revival Soon!!!)
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To: garbanzo
That's part of the problem. A lot (perhaps most) very successful people didn't do as they were told.

What I mean is that I grew up listening to my parents (and others) preaching the line that getting yourself educated, bettering yourself, was the way to improve your chances for long-term success. Something has gotten out of whack in the sense that appears such is no longer the case. So what do we tell the best and brightest today, that are fully capable of achieving very high levels of learning and skills, only to be thrown out on the street when their employer, private industry or the public sector, tells them they're not wanted or no good. Real innovations come from people who have some measure of intelligence. Your average textile worker or steel mill employee, while perfectly fine people and good workers, aren't the ones who are going to advnace fields like aerospace, semiconductors, materials science, systems engineering, energy resource development, etc. I see the devastation for individuals and families and have all the sympathy in the world for those individual tragedies, but am also concerned about the larger picture, of where this country will be in 50 years if we throw away the intellectual capital it has taken decades to garner, all because some politician decides more votes can be bought by closing down a productive and useful research program, or some corporate bean counter can earn a $100K bonus by shaving a tenth of a point off their corporate budget and add that much more to the proverbial bottom line for that quarter.

324 posted on 08/07/2003 6:08:40 PM PDT by chimera
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To: AdamSelene235; Dr Warmoose
because China is a slave nation paying slave wages.

When was the last time you were there?

On the ChiCom "show tour" or in real China?

325 posted on 08/07/2003 6:09:46 PM PDT by ninenot (Torquemada: Due for Revival Soon!!!)
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To: null and void
Analogy is false.

That's like the old "...get three women to have the baby and it will only take 3 months..."

Programming is linear, even if it's modularized. And you still need someone to understand the WHOLE system, not just the mods.
326 posted on 08/07/2003 6:11:54 PM PDT by ninenot (Torquemada: Due for Revival Soon!!!)
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To: Dr Warmoose
Let me work you through this: Why is Sprint relocating its jobs to foreign nations? Because it is cheaper for them to do that. If they had to factor the costs of tariffs into the equation, they may find that not moving the jobs overseas is their best option.

Quite true. Instead of outsourcing 60% of the jobs in a business unit, they may simply decide to shut down the business unit completely, and fire 100% of the employees.

327 posted on 08/07/2003 6:12:09 PM PDT by Poohbah (Crush your enemies, see them driven before you, and hear the lamentations of their women.)
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To: ninenot
So--how does this tubercular French libertarian (not Christian, I emphasize) economist/polemicist propose to pay for the toys of the Army?

He is French, that means that they just surrender to whoever stops by and they wait until the US military comes up and saves them.

Otherwise, they Libertines want Anarchy which is the most efficient and cheapest path to total tyranny. (which is what Libertines really want - think Hegellian Dialectics)

328 posted on 08/07/2003 6:16:08 PM PDT by Dr Warmoose
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To: Dr Warmoose
Missing from your analysis is the number of domestic jobs lost because Sprint can now charge more for its product or service domestically. You intend to keep the price of labor at a artificial level. Sprint will pass that cost along to you.
329 posted on 08/07/2003 6:20:00 PM PDT by 1rudeboy
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To: Dr Warmoose
The displaced IT worker is now not paying taxes, rather he/she is probably collecting entitlements

No, we ex-IT ruffians know how to keep our income data well outside IRS perusal. That's what our education and experience trained us to do: manage records.

We used to pay scads of various taxes (me, ~20K on ~50K+ for 10 years) but once we retired our benefits, we're rather free agents now, and unless India gets the big monsoon, Uncle Sam can count me as a non-contributor.

What Uncle Sam should grouse about is that his Pell grants put me through college.

330 posted on 08/07/2003 6:21:36 PM PDT by txhurl
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To: templar
This makes sabotage of the international links a viable military strategy to use against US by anyone smart enough to coordinate some serious hacking and sabotage. Let's keep this idea secret between ourselves though, we wouldn't want to give any of our Islamic friends any ideas. Or our Chinese friends either, for that matter.

Isn't Cuba and Iran blocking/jamming US satellite communications right now?

331 posted on 08/07/2003 6:26:30 PM PDT by Dr Warmoose
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To: bert
The new contract will cost the union jobs.

I work for Sprint. We are not unionized. I know several of the people that will be out of work. As the article said, contractors will be the first ones to be let go. I am very sure that the best of the best will remain with the company.

Sprint is simply moving the maintanance of our admistratition records system to India. The upgrades and general managment will remain with the US based Sprint employees. In all honesty, all of Sprint has known about this for a few months now.

332 posted on 08/07/2003 6:27:01 PM PDT by AlGone2001 (If liberals must lie to advance their agenda, why is liberalism good for me?)
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To: 1rudeboy
You intend to keep the price of labor at a artificial level. Sprint will pass that cost along to you.

Looks like someone slept through Business 101. Sprint, if it wants to stay competitive will not raise its rates, it just won't show so much profit. If Sprint can't compete then they disappear - and the business will be picked up by the more efficient and attractive (who will in turn increase their staff and purchase more equipment) meanwhile, the reasons why Sprint couldn't compete would be lost. Economic Darwinism, you say its OK to kill off American workers, it shouldn't be a problem if it kills off inefficient businesses, right?

333 posted on 08/07/2003 6:30:57 PM PDT by Dr Warmoose
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To: Poohbah
Quite true. Instead of outsourcing 60% of the jobs in a business unit, they may simply decide to shut down the business unit completely, and fire 100% of the employees

Actually that is Bravo Sierra and you know it. Sprint would be seen as weak and the client list and the assets would be purchased by another company that was more efficient.

Keep pushing the Free Traitor/Libertine agenda, when you have to resort to outright lies and total fabrication, it just reminds the sober minded people that your cause is for the insane and hallucinating.

334 posted on 08/07/2003 6:34:19 PM PDT by Dr Warmoose
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To: Dr Warmoose
If one could conjure up an enforcable tariff on offshore intellectual property, then I could be for it just because the resultant commotion would identify those parties who are gung-ho about destroying the IT, medical, accounting, analyst, and manufacturing base.

How about this? Require self reporting from companies on any IP imports and then put a whistleblower program in place. Say $1,000,000 payable to the whistleblower if charges are brought against the company? Mandatory jail time and personal fines for those convicted of violations.

335 posted on 08/07/2003 6:35:59 PM PDT by Buck72
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To: Myrddin; harpseal
Although the paper focused on Personal Computing industry, here's a relevant summary from a paper delivered during the first of this year on use of IT and Internet in this outsourcing that you two are discussing:

"The changes taking place in the computer industry value network raise important questions for national policy makers concerned with jobs, trade and technological competitiveness in their countries.

Using IT, the Internet and e-commerce, computer makers have been able to move production to low-cost locations while still retaining the high levels of coordination across the supply chain required by demand-driven production.

Partly as a result, the U.S. balance of trade in computer hardware fell from a small surplus in 1991 to a deficit of nearly $29 billion in 1998, and hardware production jobs in the U.S. have declined.

While U.S. consumers enjoy the benefits of cheap computers, and U.S. companies rely on offshore production to survive in a highly competitive market, the loss of U.S. jobs is an issue for policy makers.

Interestingly, even relatively low-cost locations such as Taiwan, Mexico and Malaysia are losing employment to even cheaper locations such as China. These changes are certainly not driven by the use of IT or the Internet, but the process is at least facilitated by those technologies. Policymakers need to be aware of these global transformations and their potential impacts on jobs and economic activity.

Whereas in the past, these transformations were limited to production work, there is evidence that U.S. companies are shifting knowledge work such as software programming and call center services offshore as well. They are using IT to support outsourcing to places such as India, China and the Philippines, with a potential loss of knowledge jobs in the U.S."

FROM

"The Role of Information Technology in Transformation of the Personal Computer Industry"

by Kenneth L. Kraemer and Jason Dedrick

Paper prepared for Transforming Enterprise, The First International Conference on the Social and Economic Implications of Information Technology, U.S. Department of Commerce, Main Auditorium, January 27-28, 2003.

336 posted on 08/07/2003 6:36:35 PM PDT by bwteim (bwteim = Begin With The End In Mind)
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To: ex-snook
Every union job lost here is a net gain for the economy for everyone. Free trade=growth

President Bush: Keep on doing what you are doing!

337 posted on 08/07/2003 6:40:24 PM PDT by eleni121
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To: Dr Warmoose
Actually that is Bravo Sierra and you know it.

Actually, it isn't, and you know it.

Sprint would be seen as weak and the client list and the assets would be purchased by another company that was more efficient.

Companies have closed down business units before, they do so today, and they'll continue to do it in the future.

Ever hear the phrase "stick to the knitting?"

If you're not making a profit in a particular business area, you may (a) figure out how to make a profit in that area (which usually involves cutting costs), (b) accept it as a "loss leader" (if you can contain the losses to an acceptable level), or (c) get out of that business area and stick to the things that actually are profitable.

Keep pushing the Free Traitor/Libertine agenda, when you have to resort to outright lies and total fabrication, it just reminds the sober minded people that your cause is for the insane and hallucinating.

You're the one arguing that no company ever shuts down an unprofitable business unit. I think that appends the description "insane and hallucinating" onto you instead of me.

338 posted on 08/07/2003 6:41:34 PM PDT by Poohbah (Crush your enemies, see them driven before you, and hear the lamentations of their women.)
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To: harpseal
Harley Davidson is doing just fine in asia and the "gray market" in China bodes well for them when China finally decreases its protective tarrifs..

I remember a few years back Mercedes Benz ahd the same problem (still does in many countries)but consumers still found ways to buy em and drive em.

339 posted on 08/07/2003 6:44:18 PM PDT by eleni121
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To: Dr Warmoose
Never took Business 101. But I did take Advanced Macroeconomics (Econ 402, if you are keeping score). From an unrepentant Keynesian, no less. Your suggestion that a domestic producer would not take the opportunity to raise prices in its domestic market after the government imposes an import-tariff is absurd on its face. Even my professor did not try to make that argument.

Quick quiz: Why did Bush slap a tariff on imported steel, and what did domestic steel producers do in response?

340 posted on 08/07/2003 6:47:01 PM PDT by 1rudeboy
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