Sprint to reclaim some employees as Ericsson contract ends

Sprint Corp. will renew only parts of its wireless network management contract with Ericsson in September, a move that will return some employees to the Overland Park-based carrier.

Sprint’s chief technology officer John Saw revealed the plan in a blog post on Sprint’s website. He offered no numbers on how many employees would switch companies.

A Sprint spokesman said in an email Wednesday that “conversations with employees are happening today” and that the company could not discuss how many would be impacted. An announcement from Ericsson made no mention of an impact on employees.

Ericsson signed a seven-year deal with Sprint in 2009 that led 6,000 Sprint employees essentially to become Ericsson employees. The news that Sprint will reclaim some of that work in-house and take on additional employees comes as the deal is set to expire.

“Ericsson will provide some multi-vendor services that support the ongoing operations and development of our network,” Saw wrote, “while overall Network Service Assurance will be performed by Sprint. As a result, some Ericsson employees will transition to Sprint, while others will remain with Ericsson.”

Saw wrote that the decision is part of a larger strategy at Sprint, which is making a stronger competitive showing in network performance tests against its national rivals, Verizon, AT&T and T-Mobile. Confidence in the network had Sprint executives talking this week about raising prices.

“Being closely connected to our network and our customers is a key aspect of Sprint’s turn-around strategy. Therefore, this is the right time for Sprint to take on more direct responsibility for its operations,” Saw’s blog post said.

Sprint CEO Marcelo Claure was asked earlier this week about the company’s network upgrade work and the Ericsson contract. He said that Sprint was taking a more direct role in its network and that this was in part a cost-savings measure.

“Sprint traditionally was a company that pretty much outsourced everything to third parties, and when you outsource everything to third parties there’s somebody else making lots of money in the middle,” Claure had said.

He said Ericsson remained an important partner but that “we are taking full control of our network, and that is the only way we can thrive if we have our own engineers, our own people managing our network.”

At the time of the Ericsson contract, Sprint described the work as involving the day-to-day operations and maintenance of its wireless and wireline networks. The 6,000 employees included about 2,000 in the Kansas City area that essentially stayed put at the Overland Park campus of Sprint but began to wear an Ericsson badge.

The 2009 contract called for Ericsson to receive between $4.5 billion and $5 billion over the seven years.

This story was originally published July 27, 2016 at 6:11 PM with the headline "Sprint to reclaim some employees as Ericsson contract ends."