Quick follow-up on Sprint…with a parallel story about The Kansas City Star.
It turns out, according to a story posted the kansascity.com website today that Sprint’s workforce reduction this fall will actually come in at about 3,700 people, not the 2,700 the company indicated earlier.
Two days ago, on Monday, Marcelo Claure, Sprint’s new c.e.o., said that Sprint would reduce its workforce by an additional 2,000 people, over and above 687 people whom it downsized in October. Today, however, the company acknowledged that the 687-figure had actually mushroomed to about 1,700, putting the October-to-end-of-the-year cuts at about 3,700.
KC Star business reporter Mark Davis paraphrased Sprint spokesman Doug Duvall as saying that Sprint was offering voluntary buyouts to reach at least part of the 2,000 jobs left to be cut. If that didn’t get the job done, so to speak, layoffs would follow.
Davis also reported that employment in the Kansas City area will end this week at about 6,800, where it had been 7,500 earlier this year.
To put all this in perspective, The Star ran a chart on Monday, showing that in January 2007 — less than eigh0t years ago — Sprint had about 65,000 employees. In mid-September, the number was down to 33,000. Take away the new 3,700 and the company will have slightly less than 30,000 employees by the end of this year.
Of course, Sprint isn’t the only major Kansas City company taking the gas as a result of circumstances in and out of its control.
About the same time that Sprint had 65,000 employees, The Star had more than 2,000 employees. That’s now down to well under 1,000.
I’m betting now that The Star will be around, as a company called The Kansas City Star, longer than Sprint Corp. I think the Japanese company SoftBank, which owns 80 percent of Sprint, will probably offload at some point.
Among other tangents of a Sprint unraveling, I think we can look for the Sprint Center to get a name change within the next few years.
Claure
And what’s the deal with this fellow Claure, a reputed Miami billionaire who reportedly has moved, or is moving, his family to the Kansas City area as part of his effort to revive Sprint?
Claure’s main push since taking over three months ago has been to oversee a goal (or, more likely, implement a SoftBank demand) that Sprint reduce its annual budget by $1.5 billion.
It looks to me like Inspector Claure is a glorified hatchet man. I expect him and his family to be back on South Beach within a year.
There’s another KC Star corollary here…Not long after Capital Cities Inc. bought the employee-owned paper in 1977, Jim Hale, the man whom Cap Cities sent in as publisher, hired a guy named Gerald Garcia as executive editor. Like Hale, Garcia hailed from Texas, as I recall. Garcia walked around the newsroom with a perverse, snarling, grin pasted on one side of his face.
One day, Garcia summoned 20 or more highly paid employees in a conference room — most of them had made a lot of money in the $2-for-$1 stock sale — and told them they were finished. Just like that…pack up, it’s time to go.
Not long after that, Garcia left the paper and went off to points unknown. The executioner’s job was finished, too.
I would be interested in your perspective on Gary Forsee’s tenure at Sprint then on to the University of MO. I have trouble reconciling his MU stint with having operated a huge Kansas Business. Am I being too parochial?
It seems to me your instincts are right on target, Tom. Plus you bring up a pertinent issue, based on looming questions about Claure and his sketchy role.
MU’s hiring of a big-time, but ultimately failed corporate c.e.o., always smacked of a “he-must-be-able-to-handle-this-job” attitude at the university. WRONG! They should have looked for someone with a strong academic background.
Listen to what Wikipedia has to say about Forsee and the transition to MU.
“Forsee was ousted after Sprint lost 337,000 customers in the third quarter of 2007, and a little over six months later the company wrote off $31 billion related to the (Sprint Nextel) merger—essentially writing off three quarters of $42 billion Nextel’s market capitalization value as of the time of the merger. In a significant reversal of market perception of his performance, the former “Best Manager” was named one of the “Worst CEOs” in 2009 by Fortune Magazine based on the disastrous outcome of the Sprint Nextel merger.
“Despite Gary Forsee’s widely reported poor management performance throughout the Sprint Nextel merger and afterwards, he was awarded a severance package that ChiefExecutive.net described as “exceptional.” Foresee’s severance package added up to over $40 million, including a $1.5 million salary through 2009, $5 million in bonuses, stock options and restricted shares worth $23 million and an $84,000-a-month pension for life.
“After resigning from Sprint Nextel under fire, but before his last day on the job with Sprint Nextel, Forsee accepted a position as the 22nd President of the four-campus University of Missouri System on December 20, 2007. He succeeded Gordon H. Lamb, who had served in the position since April 2007. Mr. Forsee began his duties Feb. 18, 2008. His term has not been without controversy, however. Shortly after being named one of the “Worst CEOs,” Forsee was again on the hot seat over alleged insider dealing in a transaction between the University of Missouri and Cerner Corporation, under which Cerner would provide healthcare information services to the University and assimilate members of the University’s I.T. department in the process. Forsee’s son worked at Cerner for several years prior, and Forsee served on corporate boards with Cerner’s CEO, Neal Patterson. The matter quickly fell to back pages of the news and the uproar died down, but mistrust of Forsee was evident within UM’s ranks, according to news reports published at the time. After taking an extended leave since December 2010 to care for his wife, Sherry, who was diagnosed with cancer, Forsee announced his immediate resignation to the UM Board of Curators on January 7, 2011.”
I guess it’s no wonder he hasn’t worked since…$5 million in bonuses, stock and restricted shares worth $23 million and an $84,000-a-month pension for life.
Like recently fired KU head football coach Charlie Weis, Forsee is no better, in my view, than a bank robber. His next endeavor, in fact, should be establishing a “University of Fleecers,” which would devote itself to schooling aspiring crooks how to make big bucks and avoid criminal charges.
Forsee’s Folly was the purchase of Nextel. Forsee (and the shareholders) bought Nextel – an iDEN Network that was never melded into Sprint’s technology. They paid almost $40 billion for Nextel, valued at $14 billion…I wish the Overland Park employees the best amid sharp job cuts.