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Qwest Announces Minnesota Call Center Closure, Other Job Cuts throughout Country

October 30, 2008

In this time of an economic roller coaster, company closings and job losses are bound to be standard news. When it happens in the domestic United States, it is never a positive thing, even if we become immune to the sting.
 
The latest closing has been announced by Qwest (News - Alert) Communications International. Leslie Brooks Suzukamo reported in the Pioneer Press that the company is eliminating a customer call center in downtown St. Paul as part of its plan to cut 1,200 jobs nationwide.

Qwest is one of many telecommunications providers feeling the financial crunch as the trend to go all wireless continues. Customers are increasingly eliminating their home phone landlines, trading them for cell phone communications and cutting into the revenue and profits of landline providers.

Set to include both management and union employees, the layoffs will cut the company’s workforce of 34,700 by roughly three percent. Qwest would not confirm how many workers would be affected by the call center closure and the work is expected to be moved to a call center in Des Moines, Iowa.

Qwest provides employment for little more than 3,900 people in Minnesota, including more than 3,000 members of the Communications Workers of America union. Qwest provided no specific number for job eliminations in the state or any of the other 13 Western states where it offers local phone service. 

It is expected that Qwest will have a better idea by Friday as to the number of jobs cut through involuntary layoffs and buyouts. Workers were given a deadline of 5 p.m. on Friday to take a voluntary buyout. Officials expect severance to cost $40 million this quarter.

While layoffs could be avoided altogether if all workers took the buyout, company officials don’t believe that will be the result. Greg Perez, president of Local 7200 of the CWA, told the Pioneer Press that a lot of these workers are people in their 50s who need to continue working somewhere.

"The offer is great if you're past 59 1/2 and got a short window to Social Security, but if you're looking at another eight to 10 years, it could be pretty tough, especially if you've got house payments," Perez commented in the Pioneer Press.

Qwest reported dismal third quarter results, showing that profit fell to $151 million, down from $2.07 billion last year. Revenue dipped to $3.38 billion for the quarter ended Sept. 30 from $3.43 billion last year.

Analysts predict that if the company continues to lose 8 percent to 9 percent of its landlines a year, it could be in trouble in five years. Qwest can turn things around if it can balance out those losses with more high-speed Internet revenue.

The company should also consider its partnership with Verizon (News - Alert) — which provides its wireless services — and explore opportunities to make that partnership more profitable in light of consumer trends.
 

Don’t forget to check out TMCnet’s White Paper Library, which provides a selection of in-depth information on relevant topics affecting the IP Communications industry. The library offers white papers, case studies and other documents which are free to registered users.

 
 

Susan J. Campbell is a contributing editor for TMCnet and has also written for eastbiz.com. To read more of Susan's articles, please visit her columnist page.

Edited by Mae Kowalke

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