Sprint’s strategy — to cut AND grow — adds confusion to 5,000-job promise

Sprint’s promise on Wednesday to add 5,000 new jobs in the United States has stirred at least as much confusion as enthusiasm.

The muddle stems partly from efforts by industry observers to link the promise to Sprint’s early 2015 plans to hire 5,000 for a home-delivery service called Direct 2 You. It also doesn’t help that Sprint’s payroll has shrunk even as it has made several hiring announcements in the last two years.

Wednesday’s promise surfaced during an impromptu news event by President-elect Donald Trump and was confirmed by Sprint’s CEO Marcelo Claure. The new jobs mostly will support customer care and sales but could involve any area of operations.

The new announcement carries political weight because it is part of a promise to Trump. Sprint acknowledged that its pledged 5,000 jobs are part of the 50,000 U.S. jobs that its chairman, Tokyo-based billionaire Masayoshi Son, promised Trump in early December. Son is CEO of SoftBank Group Corp. which is Sprint’s parent company.

Son’s December promise had been seen partly as a public relations move for a potential run at buying Sprint rival T-Mobile US. Son had hoped in 2014 to buy T-Mobile and merge the carriers but dropped those plans in the face of regulatory resistance in Washington. Trump is still making political appointments in offices that would review a potential T-Mobile deal more favorably.

Trump on Wednesday hailed Sprint’s 5,000-job promise as “very good news.” He told reporters that Sprint was acting “because of what is happening and the spirit and the hope” of his coming term as president.

In a hunt to identify the new Sprint jobs, some reports have pointed to an announcement Sprint made a more than a year and a half ago — in April 2015 — about Direct 2 You. Sprint said it planned to hire 5,000 in a national roll out of the concierge phone delivery service. But Sprint has declined to say how many of those 5,000 planned jobs it has already filled.

Sprint also has provided no indication that meeting the 5,000-job promise to Trump would actually expand its payroll. Some of the work, for example, is expected to be handled by call centers in the United States operated by other companies to provide customer assistance and handle complaints.

The company has shown that it can shed jobs as part of its company-wide transformation, essentially offsetting its many announced hiring plans.

“The question is, what does net jobs mean,” said Berge Ayvazian, an industry analyst with Wireless 20/20. “They’ve been in a churn.”

Current employment stands at 30,000, according to Sprint spokesman Dave Tovar on Thursday. The count is down by 1,000 from the 31,000 it counted as of March 31, 2015, and reported in its annual report to the Securities and Exchange Commission.

The payroll shrank even as Sprint announced several expansions and specific hiring plans.

In May, Sprint announced it had formed its own in-house advertising agency called Yellow Fan Studios. It had hired about 30 and planned to add 30 more.

In July, Sprint said it would return jobs to its Overland Park campus by renewing only parts of its 2009 network management contract with Ericsson. That contract moved 2,000 Sprint headquarters employees over to Ericsson, and 6,000 employees in total. The company has declined to say how many jobs would come back to Sprint.

Two weeks earlier, Sprint said its prepaid wireless business Virgin Mobile would set up a separate headquarters in Kansas City and hire more than 50 employees in an effort to re-invigorate the Virgin brand.

In February, Sprint announced plans to open 500 retail stores to be co-owned by European retailer Dixons Carphone, but Sprint has not announced any job totals with the effort.

The April 2015 announcement of 5,000 Direct 2 You jobs began with a pilot of the concierge service in Kansas City involving 30 employees.

In March 2015, Sprint announced 300 news jobs in Chicago and followed that with plans for 750 more hires in the Windy City, according to a report by RCR Wireless.

Sprint’s promise to Trump includes repatriating call center jobs it had sent overseas previously.

“The 5,000 jobs will be a combination of Sprint employees and third-party vendor employees. We will re-shore some customer care jobs and others will be newly created U.S. jobs,” Tovar said in an email.

Part of Claure’s turnaround efforts at Sprint included closing or cutting back call centers in New Mexico, Tennessee, Texas, Virginia and Colorado, an effort that claimed about 2,000 jobs.

Ayvazian said bringing call center jobs back to the United States carries more than potential public relations value for Sprint. It likely makes sense as a business decision.

“They had outsourced a lot of their call center activity overseas. They must have determined it hasn’t been as effective in being able to keep customers, retain them, as well as up-sell them,” Ayvazian said.

This story was originally published December 29, 2016 at 4:33 PM with the headline "Sprint’s strategy — to cut AND grow — adds confusion to 5,000-job promise."