Ericsson workers transfer to Sprint

06/25/2012 10:49 PM

05/16/2014 6:50 PM

Sprint Nextel Corp. said Monday it is reclaiming about 240 jobs that it transferred to Ericsson Operations three years ago under a contract to run and maintain its network.

The shift involves about 150 in the Kansas City area, where Sprint already employs about 7,000. As with the 2009 transfer, the employees are changing employers rather than relocating.

The workers do the up-front engineering, planning and forecasting work on the Sprint network, such as identifying where and when network demands will come, Sprint spokeswoman Kelly Schlageter said.

Sprint’s network had been fairly stable in 2009 when it hired Ericsson Operations, part of Ericsson AB, to operate and maintain it under a 7-year contract. The deal included transfer of about 6,000 Sprint employees to Ericsson, about a third of which worked in the Kansas City area.

Schlageter said moving the network engineering jobs back to Sprint makes sense now because of the changing demands on its network. Data traffic has surged amid the widening use of smartphones, for one, and Sprint’s customer count has begun climbing again.

Ericsson Operations will continue to maintain and manage the network under the contract.

On the Sprint side now, however, is the network engineering group.

“We drew the line at a different spot,” Schlageter said. “It’s really one group that does that function and that group is coming back.”

Kathy Egan, a spokeswoman at Ericsson, also said the shift reflected the changing demands on Sprint’s network.

“It’s so dynamic, and at the time they had limited growth,” Egan said.

Both disputed a published report that the shift stemmed from any performance problems at Ericsson, which also is a principal vendor Sprint hired in its multi-billion-dollar Network Vision upgrade. Schlageter said the shifting jobs were unrelated to Network Vision.

Bloomberg News had cited a Detwiler Fenton Co. report, saying that it called the shift of employees a black eye for Ericsson. Bloomberg attributed a drop in Sprint shares Monday to the Detwiler report. The stock ended the day at $3.09, a drop of 20 cents or 6 percent.

A stock analyst said the market seemed to have a different “concern” about the employment shift, that it would drive up Sprint’s capital expenditures which would hurt its financial results.

“We do not believe this to be the case,” Jennifer Fritzsche of Wells Fargo Securities wrote in a note to clients.

Fritzsche’s note said Sprint hadn’t been investing in its network when it hired Ericsson and had little need for “in house network engineering expertise” but wants more now because of its ongoing Network Vision project.

To reach Mark Davis, call 816-234-4372 or send email to mdavis@kcstar.com

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