Sprint Nextel May Outsource Thousands Of Jobs
Outsourcing is now standard among cellphone carriers, whether it’s for call centers or retail sales. But as Sprint (NYSE: S) Nextel looks for ways to right its listing ship, it is mulling a fairly dramatic outsourcing effort that could involve thousands of its IT and network-operations employees, the Kansas City Star reports. A spokesman for the carrier declined to give specifics on the outsourcing idea other than to say it was an option. “What we spend on our network per customer is more than what our networks are spending,” said the spokesman, John Taylor.
Macquarie Research analyst Phil Cusick recently suggested the carrier might be exploring outsourcing IT-related jobs to IBM and network operations jobs to Alcatel Lucent or Ericsson (NSDQ: ERIC). He thinks the carrier could outsource as many as 5,000 to 10,000 employees through the move. “Network outsourcings typically involve transferring the affected network-operations employees (though not the network itself) to the vendor, which will then ‘right-size’ the cost structure,” Cusick wrote recently in an investor report. “Given (Sprint’s) redundant iDEN and CDMA workforces, we would expect significant layoffs (including in Kansas City) that (Sprint) may not have the political stomach to do itself.”
It’s not an entirely new idea in the industry. Carriers have various functions that operate internally and externally, oftentimes moving in both directions depending on performance and other metrics. Sprint Nextel is working on improving the customer experience, re-building its brand and increasing profitability, Taylor said. “The other focus that we have is that we really want to simplify our business and that’s been true from the very beginning (when Sprint acquired Nextel in 2005)… We’ve begun the process of turning things around, but there’s a lag of perception in the marketplace and it’s understandable.”
Posted In: Companies, SprintNextel
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Comments (4)
Nov 20, 2008 6:55 PM
Can you picture the new Verizon commercials portraying Sprint as a company with no network employees. Sprint will be laughed at all the way to bankruptcy since no one would want to buy a company that has no employees.
Nov 20, 2008 11:05 PM
Sprint’s network has been rated as one of the poorest networks already and if they us contractors(get in get out) to work their networks you will see down trends in their network performance as you do already. To remove the employees that make the network perform and live in these areas make no sense. They will continue to see customers leave to companies with better networks and customer service. Verizon will have fun with this…....
Nov 21, 2008 5:32 PM
Sprint would see most of its experienced employees leave, and their network will suffer undoubtedly in the short term. Can they run it? yes, can they run it more economically? No. When employees take ownership they out perform. This is not the answer that will solve their problems. Bad decision making in the upper management created this problem. But as usual they think they are the solution not the problem. You want to know how to fix, have them call me I’ll tell them. Turn the ownership upside down. The employees have covered their butts, that’s the only reason it has been kept afloat. They work through their miss management and red tape because they actually care more then they do. Its a sad day for America when employees who have tens of years in a company feel no loyalty at all and get screwed for miss management. Will this be the trend to come. No one will be safe. If this happens, look out Verizon employees, look out At&t, T-mobile and all network employee’s because they will follow.
Nov 23, 2008 9:38 PM
Best thing that could happen. S management refuses to make the cuts required to bring its employee/site ratio in line with other carriers since the merger. What is needed is for an impartial party to do it for them.
The network could actually improve. Currently, employees have no motivation to improve things. Bonuses are based on criteria they have no direct control over, unlike at other carriers: cash flow, churn, etc. Yes, important measures, but Joe Engineer (the guy who is getting outsourced) doesn’t care about such things. He doesn’t get graded or rewarded for making improvements for things he has control over. Change the bonus criteria and watch what happens. It doesn’t matter what company you have on your sleeve. You pay people well for what they do, if they do it well, and everything everyone wins. That is NOT the case now.