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Sprint to Close Dallas Call Center; 1,600 Employees to Be Reshuffled

Posted on: Wednesday, 4 February 2004, 06:00 CST

Feb. 5--About 1,600 Sprint Corp. workers will be reshuffled and a Dallas call center closed under a service agreement with IBM, the companies announced Wednesday.

The plan calls for closing the long distance calling center in Dallas and relocating its nearly 400 workers to a call center in Fort Worth, in the Fossil Creek business park. Sprint will continue to own and operate the Fort Worth center.

Workers at the Dallas center will have the choice of a job at the Fort Worth center or a severance package, company officials said.

The Fort Worth center handles calls for the Overland, Kan.-based company's wireless subsidiary, PCS. The call center has about 2,300 employees and will continue as a wireless center, the company said. The switch is set to take place April 30.

The five-year agreement with IBM Business Consulting calls for IBM to take over management of 21 subcontracted call centers. The centers are individually owned but take calls for various Sprint businesses.

IBM will not own any of the call centers but will manage Sprint's interest.

However, IBM will assume ownership of the Nashville, Tenn., call center now owned by Sprint. That center employs about 1,200 people, whom IBM will absorb. IBM will also provide consulting support for all Sprint customer service processes, the companies said.

The deal is seen as a move to bolster the telephone company's customer service, which some industry analysts consider subpar.

The deal parallels a multi-industry trend of outsourcing noncore jobs.

And competition within the telecommunication industry has forced a number of companies to cut costs.

"Everybody is doing it," said Jeffrey Pittsburgh, an analyst with Pittsburgh Research in Great Neck, N.Y. "The benefits and the savings can be tremendous."

None of the Metroplex workers will be laid off, said Roxie Ramirez, a Sprint spokeswoman.

The moves will save the company about $550 million over three years, Ramirez said. She declined to say how much closing the Dallas center would save the company.

The agreement will also include IBM's marketing Sprint wireless and traditional telephone services to its corporate customers. Sprint will invest about $100 million in an IBM desktop technology that will allow business customers to transfer applications on their desktops to mobile communications devices.

"Sprint is partnering with IBM to help transform their customer service processes so they can continue to build long-term, profitable customer relationships," Doug Elix, senior vice president and group executive for IBM Global Services, said in a statement.

IBM officials did not respond to calls for comment.

Last year IBM signed similar agreements with Procter & Gamble, Raytheon and Avnet. In 2002, Virginia-based Nextel Communications signed dual agreements with EDS and IBM to manage the company's technical functions and customer service operations. The customer service agreement between Nextel and IBM was for eight years and worth about $1.2 billion.

Companies outsource operations for several reasons: to save money, to let them focus on their primary business or to put the outsourced work in the hands of a business that can do it better.

Gene Walton, an analyst with Walton Holdings, an independent research firm in New York, said IBM may even continue with the outsourcing cycle.

"IBM may lay off and outsource that work to India," he said. "Of course they would not come out and say that, but I would not be surprised if that happened."

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(c) 2004, Fort Worth Star-Telegram, Texas. Distributed by Knight Ridder/Tribune Business News.

IBM, 6680, FON, PCS, NXTL, EDS, RTN, AVT, PG,

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