Business Administration Education Guide

Monday, October 15, 2007

Will Sprint Move to Kansas?

When Sprint purchased Nextel in 2005, establishing executive offices in Reston was part of the merger agreement. Nextel started and matured in Northern Virginia, and some board members believed maintaining a Northern Virginia presence was crucial to the future of the combined companies and shifting from traditional telephone lines to wireless operations.

At the time of the merger, top executives said they did not want to uproot employees. Nextel employees were reluctant to move to the Midwest, and Sprint folks wanted to avoid the high cost of living of the Washington area.

According to former executives, leaders of Sprint Nextel have discussed the possibility of relocating the company's headquarters from Reston to Sprint's longtime home in Kansas. Sprint spokeswoman Leigh Horner said the question of a headquarters move is "not an issue the board has on the table right now." However, rumors have picked up listeners when the Wall Street Journal reported that Gary D. Forsee had mentioned the idea when he resigned as Sprint's chairman and chief executive. Acting chief executive Paul Saleh discounted the gossip though.

The company currently has two corporate offices. The executive headquarters is in Reston and the operational headquarters in Kansas. Integrating Sprint and Nextel has proven to be difficult which has caused some in the company to wonder if consolidating operations at a single location would smooth the transition.

Sprint, which has Kansas roots dating to 1899, has for decades been the largest employer in the Kansas City metropolitan area. The company occupies a 200-acre office complex that resembles a large college campus.

Of the 58,600 people employed by the company, 13,000 are in Overland Park. About 4,300 people work in the Washington area.

"One advantage to moving the headquarters is that they already have more employees there," said Christopher King, an analyst who covers the company for Stifel Nicolaus, an investment research firm in Baltimore. "But they may have more trouble attracting talent."

Northern Virginia business boosters note that Sprint's presence in the region has spurred other wireless-related start-ups to locate nearby. Several of those ventures have been launched by former Nextel employees.

SOURCE: Washington Post


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