More Contact Centers Cut Back Amidst Tough Economy, Switch to Web

The jobs picture is ugly and is going to get uglier still. Think-tank the Economic Policy Institute, citing the U.S. Bureau of Labor Statistics’ (BLS) June 2009 employment report, shows that while the pace of losses is stabilizing jobs are still being lost at a stunning rate, and unemployment continues to rise. Unemployment will almost certainly pass 10 percent by the end of the year. The BLS reported that while the jobless percentage was little changed at 9.5 percent, the economy shed another 467,000 jobs.

Those bleak numbers are about to grow with the latest round of contact center closures and cutbacks. The Springfield, Mass. Republican reported July 2 that American Airlines will shutter its 500-agent facility in Windsor, Conn.

Airline spokesperson Guillermo Sanez alluded to reduced demand, which led the carrier to cut the number of available seats, by 7.5 percent so far in 2009 alone. R. Nelson Griebel, president and CEO of MetroHartford Alliance, a de facto regional chamber of commerce and economic development agency, pointed to more online booking and less calling. The contact center had 800 employees when it moved to Windsor from downtown Hartford in 2002.

Not all of the agents affected will be necessarily unemployed. Some will be given the option of taking positions at American Airlines’ other centers: in Tucson, Ariz., Raleigh, N.C., or Dallas, Texas.

And in cutting edge move, the staff would also be allowed to work from home. The airline would link its phone lines and its reservation system with workers’ homes through the Internet.

“So if a person has a quiet place in their home where they can work without interruption, this might be an option for them,” Sanez told the newspaper.

The cuts are not limited to in-house contact centers. Teleperformance (News - Alert) will lay off 250 employees at its Akron, Ohio contact center, three years after coming to the city, reported the Akron Beacon-Journal July 2, “promising 600 full- and part-time call center and technical support jobs or the equivalent of 400 full-time jobs.”

In a release reported by the newspaper the center had provided customer care services on behalf of a major cable communications provider whose name Teleperformance declined to name for confidentiality reasons. The paper did report that three years ago when the company arrived in Akron, officials said they would be taking inbound customer service calls and offer technical support for Cox (News - Alert) Communications.

 

“The layoffs are a direct result of the client's decision to reduce excess capacity and streamline some operations into a lesser number of locations,” said the release. “Teleperformance management emphasized the client decision is not a reflection of performance at the Akron location, but rather a strategic move designed to better align resources and enable the client to fully focus on its core competencies.”

 

“This is a reflection of the national economic downturn, and is the result of the company's national client wanting to reduce overall costs,” said Akron deputy mayor David Lieberth. “We do not believe it is related to the business of any other Akron area call center. The mayor is concerned about any loss of jobs in the city, and we continue our efforts to generate new jobs and retain the employment that we have.”

There may be hope for the let-go Teleperformance staff. A new firm, PlusOne Communications, recently opened a new center in Akron and was reported to project hiring up to employees in 15 months said the newspaper. The company said it will add 60 or more a month as business demands. With this news hundreds of people have applied for work.

The firm’s strategy is to focus on superior call handling quality to help firms win back customers. If prospective clients can be convinced, in this case and others perhaps the employment numbers will not be as bleak as projected.

Could the recovery and the future be in a ‘quality-enabled economy?’ Filling out other contact centers and deploying telework for remaining staff as American Airlines is doing could help keep flying attractive and affordable, thereby preserving more jobs.

“What we’ve found is [call center] quality has gone down so fast that they’ve lost customers,” said PlusOne president Robert Madden. “Now those same clients are looking for places and ways to improve their quality and bring back quality of the entire product line and that starts with the person [customers] talk with on the phone.”