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Sears Canada Closes, Cuts Backs Contact Centers, Offshores To Philippines

June 26, 2009

Retailer Sears Canada, which unlike its U.S. counterpart still has a print catalog, is closing its Regina, Sask. contact center and is laying off 250 staff at its Belleville, Ont. site. Instead it is offshore outsourcing its order entry work to a much-lower-cost Philippines center owned by an unnamed Canadian-based teleservices firm.
 
Sears is keeping intact a third smaller contact center in Montreal, Que. The site handles French-speaking plus English-speaking customers and will not be offshored with the other jobs for that reason say observers; The Philippines does not have a pool of French-speaking workers.
 
The reasons are all too familiar: cost cutting, reluctance to invest in new technologies, and, unsaid but all-too-real: a challenging economy and the popularity of web self-service. The moves are also the latest retrenchments of contact centers in Canada, due to and accelerated by a relatively strong Canadian dollar, pushed by commodity chiefly oil price rises, that has made it less competitive as a location.
 
The moves are also the latest contact center closures and cutbacks in both cities. As reported on TMC (News - Alert), StarTek shut down its Regina center earlier this year. Teleperformance and TeleTech have cut back and closed operations respectively in the Belleville area. Belleville has been a contact center hub with Sears Canada, the largest in-house and the best paying site with the most benefits, say former contact center agents, along with Stream, NCO, Beautyrock, and until recently Teleperformance (News - Alert).
 
CBC reported that employees at both the Regina and the Belleville centers were given their notices Thursday June 25, which will take effect in September. Sears Canada spokesperson Vincent Power cites advancing technology and the seasonal requirements of the service.
Power also told the Regina Leader-Post that Sears Canada must invest in the technology or work with a third party provider that already invests in the knowledge.
 
“’We took the decision to outsource the call centre positions at Sears that are to do with basic order taking and give those to a third party provider who's in that business all the time,’” said Power. “’That allows us to focus on our core business of merchandising. (The provider) will stay up to date with all the technologies.’”
 
The Sears Canada spokesperson added that another determining factor in the decision to close the contact center is that because Sears is a retailer with seasonal peaks in sales, it is challenging to schedule the hours in a contact center in an efficient manner. A third-party provider, which deals with other customers, can balance out that seasonal load.
 
“’We’ve used this company before, and we’ve had calls answered by that company’s employees in the Philippines, and it's been seamless to our customers,’” said Power. “’We have drafted and completed a very high-level service agreement with this company so that our customers get a good experience.’”
 
Once the Regina site closes, any calls that escalate beyond basic order taking will continue to be addressed by Sears Canada employees, but will be handled by the Belleville, site. Power wouldn't comment to the Leader-Post on the number of jobs that would remain in Belleville, but said “’it's still a fairly substantial call centre operation there.’”
“’This move has nothing to do with the way our employees were working, or their performance [but] it’s just the call centre industry has changed in Canada,’” he said. “’If we want to stay competitive and viable, and save more jobs in the long run, we've got to take steps like this from time to time — they're difficult decisions though.’”
The (Belleville) Intelligencer reported that a longtime employee at the center said many workers were shocked at the news.
 
“’Over the past three weeks we've been busier than we were at Christmastime,’” said the employee, who asked her name not be used. ‘”No one at all saw this coming.’”
 
The woman said it appeared the center was “’test-driving’” different outsourcing companies during this past Christmas holiday season, however.
 
“’They were first from the Philippines, then East India,’” she said. “’But the screw-ups of orders and complaints from customers were so bad, they stopped using them.’”
 
The Belleville and the Montreal centers will continue to handle other customer inquiries such as deliveries. Former employees report that there were separate teams for catalog and delivery. They doubt whether delivery will go offshore because the calls can be more involved and challenging to handle, especially with Canadian community and street names, quite a few of which are based on First Nations words.
 
“Delivery calls are not usually happy ones,” said the onetime employee. “Customers are calling because their appliances or furniture was late, was damaged, or that the delivery staff damaged their homes. I can’t see these being sent overseas because the last things you want are misunderstandings over language and meaning when the customers are already annoyed.”

Brendan B. Read is TMCnet’s Senior Contributing Editor. To read more of Brendan’s articles, please visit his columnist page.

Edited by Tim Gray

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