Sprint Offshoring, and Forcing Workers to Train Replacements
Sprint Offshoring, and Forcing Workers to Train Replacements
Date: Wednesday, September 17, 2003 12:37 PM
JOB DESTRUCTION NEWSLETTER
www.ZaZona.com
On the surface, these two articles didn't appear to be much different
than most of the outsourcing articles that read on a daily basis. This
appeared to be just another sad story about how Americans are losing
their jobs to offshoring - in this case the villain is Sprint.
There was one tiny paragraph towards the end of the article that caught
my attention, and it sent the alarm bells ringing!
Employees will be asked to stay on to help train their
replacements during a transition period that could last
months. During that time, employees will get help finding
a new job, within Sprint or with other companies.
Once again we are seeing how companies import foreign workers by using
H-1B and L-1 visas, and then force their American workers to train
their replacements. Companies usually coerce their employees by using a
form of blackmail when they are told something similar to this: "train
your replacement or lose your severance payments." In most cases, the
frightened and desperate American employees relent and trains his or
her foreign replacement. Mike Emmons and Linda Kilcrease fought back
but they are the rare exceptions.
If outsourcing is to be stopped, we must first abolish nonimmigrant
visas such as H-1B or L-1 visas. Nonimmigrant visa holders provide a
vital link between the US based company and the foreign office where
the jobs are to be outsourced. Companies cannot offshore high-tech jobs
until they bring in the nonimmigrants to learn the company culture and
technology. Abolishing these visas will put a stop to most offshoring,
and that's why activists should concentrate on the real job destroyer:
H-1B and L-1 visas.
GE Real Estate's CEO Zupnick's quotes from a previous newsletter:
You have to bring people to America to learn your
applications, and that takes time, particularly if
you're doing it with a new vendor for the first time.
You need to keep employees there long enough to share
their knowledge with their Indian replacements.
If any of you have contacts with Sprint employees that are training
their nonimmigrant replacements, please contact me and I will publish
your story anonymously. Better yet, contact the reporters who wrote
these articles:
To reach Suzanne King, technology and telecommunications reporter, call
(816) 234-4336 or e-mail
sking@kcstar.com
To reach David Hayes, senior technology reporter, call
(816) 234-4904 or e-mail
dhayes@kcstar.com
http://www.kansascity.com/mld/kansascity/6781161.htm
Posted on Tue, Sep. 16, 2003
Sprint will outsource technology jobs
Local work may head overseas
By SUZANNE KING and DAVID HAYES
The Kansas City Star
Sprint Corp. has hired two companies to spearhead an outsourcing
project that eventually could send hundreds of local technology jobs
overseas.
The Overland Park company said it had signed contracts with IBM Global
Services and EDS to develop and maintain some Sprint software. Sprint
expects to save $150 million over the life of the five-year contracts.
An undetermined number of computer programmers and others will lose
their jobs as Sprint tries to both cut costs and streamline its massive
information technology operations, said Michael Stout, Sprint's chief
information officer since May.
Stout said he was uncertain how many Sprint workers would lose their
jobs over the next 12 months as a result of the outsourcing. Exact
numbers won't be known until the company meets with EDS and IBM over
the next few months, he said.
I anticipate there will be several hundred, Stout said.
However, the program announced Monday may be phase one of what could
become a larger plan to outsource additional low-level programming
jobs. Many of those jobs could go to large consulting companies with
facilities in
India and elsewhere.
EDS and IBM were selected from 12 consulting firms that responded to a
request for proposals Sprint put out this summer. The two companies
already do outsourcing for AT&T or MCI, Sprint's main competitors in
the long-distance market.
Employees of the consulting companies will take over tasks such as
software development, computer coding and specification writing. The
first employees to be affected work in billing, finance and human
resource systems.
In announcing the outsourcing program, Sprint is joining other American
companies that have turned to consulting companies to farm out basic
jobs. Many of those tasks, in turn, are completed in India, Pakistan
and elsewhere, where salaries are substantially lower.
However, the practice is starting to come under scrutiny, with
estimates that up to 500,000 American technology workers could lose
their jobs by the end of 2004 as companies move work offshore.
Following a request from U.S. Rep. Ike Skelton, a Democrat who
represents Missouri's 4th District, and two other congressmen, the
General Accounting Office is studying the impact of exporting
engineering and technical jobs overseas.
Dennis Moore, a Democrat who represents Kansas' 3rd District, said he
was pleased the GAO was studying the issue.
U.S. businesses usually implement outsourcing to cut costs and enhance
competitiveness in a global economy, Moore said in a statement Monday.
But there is a significant concern that the U.S. may be sending too
many jobs overseas than is good for homeland and economic security.
It's unclear how many Sprint jobs might end up in other parts of the
world. Both EDS and IBM have operations in the United States and
throughout the world.
Stout met with employees Monday morning to tell them contracts had been
signed and the outsourcing project was moving forward. Sprint officials
worked through the weekend to complete the contracts so the project
could move forward as quickly as possible.
I can't take away the anxiety this creates, Stout said. I cannot make
it easy for anyone. But I can move as quickly as possible so we can get
through it.
Representatives of IBM and EDS are expected on the Sprint campus today
to begin the detailed work involved in planning the transition.
Although Sprint expects to save $150 million through the outsourcing
program, Stout said financial savings weren't the overriding
consideration.
We need to be in a position to provide software of the highest quality
at the lowest cost, he said.
Sprint will gain flexibility by turning to the outsourcing model. For
example, if a particular technology project requires new programming
skills, the outsourcing firm can find them on demand. But Sprint
employees would have to be re-trained, an expensive and time-consuming
process.
Working through outsourcing firms also will help Sprint refine a
sprawling information technology organization, Stout said.
When he took over at Sprint earlier this year, Stout said, he found
four technology organizations spread across the company's divisions.
Work was duplicated and resources were used inefficiently.
We've brought those four now into one organization, but we still have
all of the duplication, competing, overlapping and inefficiencies, said
Stout, who came to Sprint from GE Capital Services Inc. By outsourcing,
I can immediately leapfrog from where I am today to a company that has
superior capabilities and processes.
Stout said the two companies could do in a year or two what would take
Sprint five or six years to accomplish.
Stout said he was working to minimize layoffs by replacing existing
contractors with Sprint employees.
Sprint's information technology department has 7,000 employees with
5,500 in the Kansas City area. In addition, the company has 1,000
employees who work through contracting companies.
Some employees could be notified within a couple of months that their
jobs will be eliminated, but for others it will take more time.
Employees will be asked to stay on to help train their replacements
during a transition period that could last months. During that time,
employees will get help finding a new job, within Sprint or with other
companies. It's possible some Sprint workers could end up working for
EDS or IBM, Stout said.
Sprint also will provide career counseling, help with resumes and
reverse job fairs, to bring potential employers to the Sprint campus.
My goal is for every single person to land on his feet, Stout said.
That may be difficult in a job market that has hit technology workers
exceptionally hard. An estimated 500,000 people in information
technology professions have lost their jobs since 2001, and many remain
unemployed or have abandoned technology for work in other professions.
In a July study, consultants from Gartner Inc. estimated that fewer
than 40 percent of people whose jobs moved offshore through 2005 would
be reassigned to jobs with their current employer.
The study also predicts an increasing reliance on workers overseas and
estimates that 500,000 additional U.S. technology jobs will disappear
by the end of next year.
The impact on service providers as well as hardware, software and
telecom vendors is very sharp, said Diane Morello, who wrote the
Gartner report.
Morello said companies needed to identify the technologies that would
fuel their future business development and keep those in-house.
Stout said Sprint would make sure that it retained the special sauce
highly trained IT workers who know the structure of the company's
software systems.
Sprint's FON stock closed Monday at $14.63, down 41 cents. Sprint's PCS
stock closed at $5.68, down 14 cents.
To reach Suzanne King, technology and telecommunications reporter, call
(816) 234-4336 or e-mail
sking@kcstar.com.
To reach David Hayes, senior technology reporter, call
(816) 234-4904 or e-mail
dhayes@kcstar.com.
http://www.kansascity.com/mld/kansascitystar/business/technology/6779989.htm
Posted on Tue, Sep. 16, 2003
BITS AND BYTES: Jury is in about offshoring
By DAVID HAYES
Columnist
Sprint Corp. will be in for a rough ride as it acts on plans announced
Monday to eliminate jobs in the United States and move them overseas.
Though the practice, called offshoring, has captured the financial
imagination of executives at dozens of American companies, it's leaving
U.S. workers caught in a weak economy both indignant and angry.
Offshoring is nothing new -- workers in the garment, shoe and
electronics industry have seen it for decades. This time, though,
offshoring is hitting at the heart of America's highly paid tech
workers -- some who entered the business because companies like Sprint
spent years talking about the need for information technology workers.
And it doesn't even appear to be ending in the tech sector. JP Morgan
Chase & Co. is planning to offshore financial analyst jobs to India,
according to an article published earlier this month in The Times of
India. "You should see other large businesses moving research and
operations to India," Merrill Lynch Executive Vice President Andrew
Holland told the newspaper.
When I wrote about offshoring a couple of weeks ago, I talked about a
proposal by Robert Perrucci, an author and sociology professor at
Purdue University, to tax companies that offshore jobs. I was deluged
with e-mail and phone calls -- more than 130 so far, and they're still
coming.
Here's what a few of those readers had to say on the issue.
"My husband lost his job almost nine months ago to outsourcing," said
Betty Ost-Everley of Kansas City. "His job was a technical one for a
non-profit organization.
"The non-profit couldn't make its budget because those who had pledged
support could no longer honor their commitments because they,
themselves, had lost a job. My husband has yet to find a job in his
field, and it is looking more grim with each passing week. He is
competing for job opportunities outside his field and is finding scores
of outplaced workers knocking, each facing a similar situation.
"Now, we hear of even more layoffs, staff reductions and outsourcing to
come in the very near future to an already sick and getting-sicker
economy. The Band-Aids the public assistance programs are using to hold
their systems together can't continue to hold. Like a line of dominoes
running out of control, this must stop, and soon! Can Depression-age
bread lines be far behind?"
Another reader worried about the potential for a brain drain from
American companies.
"Your article brings to mind that the CEOs and companies that are
taking the knowledge and work overseas so that they might make more
bucks are trying to make the people here serfs," said Rex P. Dillee of
Independence.
"They should try learning that money has to come from people that have
skills and JOBs. Should offshore factories be so great, let them give
up their citizenship and go live there as well as sell the product to
those people should they be able to afford them on the meager wages
they get paid."
Several Sprint employees wrote to say they'd decided to write their
congressmen to ask them to take a look at Perrucci's idea.
"I wrote three Congress contacts and only one in my district, Rep.
Dennis Moore, had a lukewarm response and suggested setting up an
investigational study to determine the long-term impact of offshoring,"
said one employee, who asked that his name be withheld because he is on
the layoff list.
"The other two (congressmen) did nothing but praise themselves on the
awesome unemployment benefits they have made available to Kansas and
Missouri. When I replied that I would rather be working than drawing
unemployment, which is also unstable and not a guaranteed wage, they
never responded! By the way, I am getting laid off within 6 months."
Another Sprint employee said American companies are being shortsighted.
"I don't understand how corporate America can operate with such tunnel
vision," he said. "What they don't realize, is that when they knock the
legs out from under middle-class America, they are inevitably dooming
themselves! America's economy will quickly start slipping."
A Prairie Village reader said the impacts of lost jobs are devastating.
"Prior to the dot-com collapse, I was an IT recruiter," said Rolland
Love. "I worked primarily with high-end candidates in the computer
field. In the past 2-plus years it has been like a trail of tears
watching these talented professionals go from enjoying the good things
that life has to offer, to spending days filled with a lack of hope and
depression."
The economy "has caused many to file bankruptcy, their families have
broken up and they are now working at minimum wage jobs, like key-entry
and fast food," Love said. "I recently received another round of calls
from employees at Sprint who I worked with in the past, saying that the
company has made conditions so bad they are forcing workers to quit,
which of course makes the company money."
An Overland Park man suggested corporations take a look at history
before moving jobs overseas.
"Wasn't there one successful industrialist, possibly Henry Ford, who
thought it wise to pay good or at least decent wages so that workers
could afford to buy the mass produced items that the workers were
actually manufacturing?" asked Joe Quinn. "Here's a thought execs might
like: Let's keep the customers we already have as opposed to spending a
fortune looking for replacement customers who have less money!"
A few readers, even a Sprint employee who didn't want his name used
because he was afraid of losing his job, did take a look at the
situation from a corporate standpoint.
"I am a Sprint IT employee and am equally concerned about the current
initiative," he said. "My job may be on the hook too. While I share the
pain felt by many, I must say that we are villainizing the companies
without thinking on a broad perspective.
"They are doing what is best for their business in this global economy.
However much we may not like it, the companies have no choice, they
either compete or die. Welcome to capitalism!"
Cash for research
While Sprint employees worry about layoffs, a group of local
organizations is planning a seminar for entrepreneurs seeking federal
cash for research.
The session, planned for Oct. 9, will help technology and life sciences
researchers and entrepreneurs apply for U.S. Small Business Innovation
Research and Small Business Technology Transfer grants.
The session is sponsored by KCCatalyst, MoFAST, Kansas City Area Life
Sciences Institute, Kansas Technology Enterprise Corp., and the Ewing
Marion Kauffman Foundation..
The free session is scheduled for 8:30 a.m. to noon Oct. 9 at the
Marion Kauffman Foundation Conference Center, 4801 Rockhill Road. To
register, send an e-mail to kberlack@kccatalyst.com before Oct. 3.
To reach David Hayes, senior technology reporter, call (816) 234-4904
or send e-mail to dhayes@kcstar.com.
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