|
Another recessionary shoe dropped this week when Sprint announced more job reductions, but local community leaders and business people are unsure how large of an imprint that shoe will have on the local economy.
The Overland Park-based wireless company, which is the metropolitan area’s largest private employer, said it will shed 8,000 jobs to achieve $1.2 billion in cost savings. The reduction, which the company says “will impact all levels,” represents about 14 percent of the total workforce. About 1,800 jobs would be cut in the Kansas City area, where a 15 percent reduction is anticipated.
Local officials reacting to the news this week agree it is an unfortunate action that will send a shudder through the local economy. And while no one was able to quantify just how big that shudder might be, numbers from the Johnson County Economic Research Institute Inc. (CERI) show that a downsizing hurts considerably more if coming from Sprint than from many other area employers.
A recent CERI report indicated that each Sprint job was equivalent to about 2.45 typical jobs in the surrounding community in terms of salary. (See related story on Page 2A.)
Susan Bowers, president of the Heartland Multiple Listing Service, said the area can effectively absorb the blow.
“We’re fortunate because our local economy does not depend on one company so strongly. That has insulated us from what’s happened in some places,” Bowers said.
While Johnson County indeed is more diverse in its job base than many other places, CERI President Doug Davidson said that the coming of the Sprint campus and the influx of other large employers has made the area more sensitive to recessionary pressures.
“Our economy has matured to the point to where we’re more reflective of what’s going on nationally than we once were,” Davidson said.
Real estate agents who have been working with Sprint employees, Bowers said, have been anticipating the layoffs for a couple of months and making decisions based on the possibility of losing a job. She said that has helped prevent some of the workers from making purchases that would have worsened their financial situation, and it might have aided them by allowing them to “test the job market in preparation” for possibly losing their job.
“I like to accent the positive rather than the negative,” Bowers said. “I don’t see it as the sky is falling. We’ve been through these before. In our business, there still is action out there.”
Indeed, a national housing sales report released on Monday showed that home sales have rebounded somewhat.
Overland Park Mayor Carl Gerlach said that assessing the extent of the layoff’s effect is challenging.
“It’s difficult to place an economic impact on it,” Gerlach said. “Obviously, it’s very disappointing. Jobs are very important to us, and it’s going to affect the entire metropolitan area because it is the largest employer in the area.”
From the standpoint of governmental revenues, the mayor said the state will feel the pain more than cities because of the lost income tax collections.
Regardless of the effects, Gerlach said the city is powerless to do anything about it.
“We obviously do all we can to help our business community, but they have to make decisions in this difficult economy, and there’s not much the city can do to affect that,” Gerlach said.
Asked to assess what the economic fallout of the layoffs might be, Overland Park City Manager John Nachbar said, “I’m not sure anyone can credibly do that. Obviously, it has to have an impact, but we don’t have a way to separate out what’s going on in our economy locally” based on one event.
Leawood Mayor Peggy Dunn said she knows that many residents of her city work for Sprint and that some of them will be directly affected.
“My heart goes out to those people. I hope there are people out there who will have doors open and fulfilling job opportunities,” Dunn said.
Not just Sprint’s economic impact, but also its philanthropic activities, Dunn said, make it a highly important corporation for the community.
“I definitely want to see them succeed, and I know that’s the goal, but that still doesn’t make it any easier,” she said.
Kevin Jeffries, president and CEO of the Leawood Chamber of Commerce, agreed.
“It certainly will have an impact, but we just don’t know how much yet,” Jeffries said.
In addition to the layoffs, Sprint announced it would reduce costs by suspending the 401(k) match of employee contributions to those retirement savings plans. The company also said that the one-year suspension of annual salary increases that went into effect in 2008 will be extended through 2009.
Contact Loren Stanton at 385-6068, or e-mail
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
.
Trackback(0)
Comments 
Write comment
|
TrackBack URI for this entry