Austin, TX– Several recent rounds of layoffs of Texas call center workers highlight the likely role of offshoring behind these layoffs and make the case for federal and state call center legislation, the Communications Workers of America (CWA) said today.
Articles in the Dallas Business Journal and Beaumont Enterprise detail recent layoffs of call center workers in Texas and potential ties to offshoring, including:
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Alorica’s announcement in December 2018 that it would lay off 367 call center workers in Beaumont as the latest round of domestic layoffs that include hundreds of other call center worker layoffs in other states. Meanwhile, Alorica has established a massive presence overseas that is growing. For example, Alorica recently announcedit would hire 2,000 new call center workers in Guatemala.
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Comerica’s recent layoffs of 60 call center workers in the Dallas area and the company’s past relationship with offshoring vendor Conduent, which maintains a big call center presence overseas.
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In December 2018, AT&T alerted CWA to 155 total new Texas layoffs in the Texas cities of Austin (7 total employees affected), Bellaire/Houston (73), Dallas (66), and Fort Worth (7), as well as several other cities in the state. A significant number of these layoffs will be of call center workers. These layoffs are in addition to AT&T’slayoffs of 280 call center workers in the Dallas area in December 2017. Meanwhile, AT&T continues to expand its presence overseas and currently contracts with a network of at least 38 vendor-operated call centers in 8 countries: El Salvador, Mexico, Dominican Republic, Philippines, Columbia, Costa Rica, Jamaica, India, and Canada.
The potential relationship between these Texas layoffs and offshoring, presented in more detail below, makes a strong case for federal and state call center legislation.
Federal call center legislation would stand up for call center workers and U.S. taxpayers and add important new accountability and transparency to the offshoring process. The legislation would require that U.S. callers be told the location of the call center to which they are speaking; offer callers the opportunity to be connected to a U.S. based center if preferred; and make U.S. companies that offshore their call center jobs from the U.S. ineligible for certain federal grants and taxpayer-funded loans.
And state versions of the call center bill have been introduced in dozens of state legislatures across the country and would ensure that the state could retrieve taxpayer funds received by companies that move call center work overseas and insist that all customer service work done for the state be actually conducted in that state. The bill also would disqualify companies from eligibility for state grants, loans, and tax credits if they send a call center to a foreign country.
According to Claude Cummings, Jr., CWA Vice President, District 6, “Too many companies in Texas have been laying off our state’s call center workers and sending that work overseas. It’s time we stood up for our state’s workers and taxpayers and got behind call center legislation that would make it harder for companies to conduct their offshoring in secret and would instead strengthen domestic workforce and taxpayer accountability.”
Below is more information on the tie between offshoring and recent Texas call center layoffs:
Alorica: Call center offshoring behemoth Alorica has been laying off hundreds of domestic call center workers while expanding its overseas operations.
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In December 2018, the Beaumont Enterprise (TX) reported that “Some 367 workers at a local call center will be out of a job by late January … Alorica, an international customer service communications company, will close its facility at 4645 Concord Road in Beaumont Jan. 25.
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In late October 2018, Indiana media outlets reported that customer contact company Alorica would close a call center in Terre Haute, laying off up to 300 workers in the process.
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In September 2018, Alorica announced news of the layoffs of 635 call center workers in Kennesaw, Georgia
Meanwhile, Alorica has established a sizeable workforce overseas in countries that are key hubs for offshored call center and customer contact work. Alorica’s overseas presence includes:
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In November 2018, the call center industry publication NearShore Americas published a story titled, “Alorica Bets Big on Guatemala, to Add 2000 New Staff.” The story noted: “Alorica is embarking on an ambitious expansion program in Guatemala, with the BPO and call center services provider announcing plans to add more than 2000 people to its payroll in the Central American country. As part of the expansion, the BPO provider has unveiled a new contact center in Guatemala City … The Irvine, California-based company is looking to hire bilingual candidates who can speak in both English and Spanish.”
Additional Alorica offshore operations include:
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Philippines: Alorica employs more than 35,000 call center workers in the Philippines including more than 10,000 Filipino call center workers hired after announcing plans to scale up operations in the country in March 2017 (Business News Asia 3/14/2017). The Alorica website now highlights 17 different call center facility locations in the Philippines alone.
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Operations in nine Latin American countries: The company’s website highlights a presence in nine countries in Latin America – Antigua, Brazil, Dominican Republic, Guatemala, Honduras, Jamaica, Mexico, Panama and Uruguay – totaling 20 different locations and a total of 12,000 call center seats (Alorica website). As noted, the Guatemala presence is set to expand by 2,000 workers and into a major new facility as of November 2018 (NearShore Americas).
Notably, Alorica workers in the Philippines have been speaking out against their treatment at the hands of Alorica. As NearShore Americas described in September, “A labor union in the Philippines has called for a strike, accusing global call center and BPO services provider Alorica of harassing and dismissing employees.”
Comerica and Conduent: In December 2018, the Dallas Business Journal reported that Comerica was planning to lay off 60 call center workers in the Dallas area. While Comerica’s direct employees are in the U.S., the company appears to have a relationship with BPO provider Conduent, which has been linked to call center offshoring, as well as ties to fraud.
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An August 2018 article in American Banker highlights how Comerica outsourced customer care and call center work around its prepaid federal benefits card to Conduent and that Conduent employees were implicated in related fraud:
“Comerica said that it believes the Direct Express fraud is limited to the cardless service, and that one employee at a Direct Express call center has been fired over the security breach. Comerica has oversight of the Direct Express program but outsources the main call center function to Conduent, a publicly traded conglomerate in Florsham Park, N.J.
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NJ-based Conduent (headquarters in Florham Park) is a major call center offshoring company.
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In August 2018, Conduent announced it would close a Colorado Springs call center in October 2018, laying off 410 workers (The Colorado Springs Gazette, 8/14/18). In April 2016, Conduent (then Xerox) announced the layoffs of 350 employees from the same Colorado Springs call center (The Gazette, 4/1/16). In March 2017, Conduentclosed its call center in Greeley, CO and laid off 178 employees [The Tribune in Greeley, CO, 2/8/17]
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The multiple rounds of Colorado call center layoffs by Conduent/Xerox come after a larger round of layoffs and closures at American call centers that also affected company call centers in Louisiana, Maine, North Carolina, and Washington totaling more than 950 layoffs of American workers in total. (Portland Press Herald, 9/1/16], [Geek Wire, 3/15/16], [Raleigh News & Observer, 1/26/16], [WAFB-CBS in Baton Rouge, LA, 3/9/16], [Charlotte BizJournals, 2/1/17)
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Meanwhile, Conduent/Xerox have been ramping up their presence and workforce in call centers overseas in recent years, including during the same timeframe as the domestic call center layoffs.
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Philippines: As of June 2018, Conduent had approximately 8,500 workers in the Philippines, located in the Manila area and in Cebu City (Manila Standard Business, June 2018). In October 2016, Xerox announced that it was looking to hire 800 additional workers by the end of 2016 for its eight facilities in Metro Manila and Cebu in the Philippines [Manila Times,9/2/16].
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Malaysia: As of June 2018, Conduent employed 700 workers in Kuala Lumpur, Malaysia, including those providing call center and customer service work (Manila Standard Business, June 2018).
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Jamaica: In 2015, Xerox opened two major new call centers in Jamaica – a 1,000 employee facility in Kingston and a 900 employee facility in Montego Bay (Site Selection Group, “Location Intelligence Report 2016). In 2017, Conduent expanded one of the Jamaican sites to an additional 300 employees (Site Selection Group, Location Intelligence Report 2018)
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Capitol One: Capitol One has laid off thousands of U.S.-based call center employees in recent years, while growing its call center operations overseas.
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Capital One announced in the layoff of 950 workers in Plano, TX in November 2017,including 200 call center workers. Regarding the call center layoffs, the company again blamed technology and changing customer behavior rather than acknowledging the role of their offshoring practices. As the Dallas News recapped, “Company officials say they’ve seen a decline in call volume as more customers have turned to the mobile app, bank branches or other channels for their banking needs.”
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In December 2018, the Dallas Business Journal updated the total number of Plano layoffs, raising possibility that the layoffs included more call center workers than originally noted. The article listed Capitol One as one of “a number of financial companies that have shed call center workers in the North Texas area over the past year,” noting that “Virginia-based Capital One has laid off more than 1,000 workers from its sprawling Plano campus as it exits the mortgage business,” noting the 1,000
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In August 2017, Capital One announced that it would eliminate 400 call center jobs from its Rolling Meadows, IL office. In November 2017, Capital One updated the layoff totals and specifics in Rolling Meadows, announcing that a total of 452 call center workers in Rolling Meadows would lose their job over the next four months. A statement from company spokeswoman Pam Girardo laid the blame for the layoffs on changing customer behavior and new technology, noting that, “Investments in our servicing platforms and digital tools have generated significant improvements to our customer experience, and have enhanced the ability and appetite of our customers to self-service digitally.”
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In 2015, Capital One eliminated more than 1,500 American call center jobs by closing call centers in Oregon and South Dakota and eliminated hundreds of Richmond, Virginia IT positions.
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Additionally, in December 2016, Sitel Corporation announced 800 layoffs in a Pompano Beach, Florida call center whose “primary client was Capital One.”
When announcing these layoffs and attributing them to new technologies and changing consumer behavior, Capital One has failed to mention that it has significantly expanded its call center operations overseas in recent years, in particular in the Philippines. If customer needs and digital tools were really the cause of the layoffs, why has Capital One expanded its call center operations in the Philippines, recently adding several thousand new jobs in that country that service the U.S. marketplace?
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An April 2016 article in the Manila Times reported that Capital One was opening a second BPO site in the Philippines by the end of 2016, adding an additional 2,000 jobs to its existing 2,800 Filipino employees (meaning that the company had nearly 5,000 call center and other customer contact employees in the Philippines by the end of 2016). As the article described, “The local business process outsourcing (BPO) arm of Capital One has more than 2,800 employees in the Philippines. With the second site that will house its expanded operations, Capital One Philippines is expected to nearly double its employees, creating another 2,000 jobs.”
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The Capital One operation in the Philippines was first established in 2013 and the company also has an overseas contact center operations in India (as well as additional operations in the U.S., and a call center presence in Canada and U.K.)
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The Capitol One Philippines operation services the U.S. marketplace: “Capital One Philippines is the local contact center unit of Capital One Financial Corp.’s US credit card business.”
AT&T
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In December 2018, AT&T alerted CWA to 155 total new Texas layoffs in the Texas cities of Austin (7 total employees affected), Bellaire/Houston (73), Dallas (66), and Fort Worth (7), as well as several other cities in the state.
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AT&T laid off 280 call center workers in the Dallas area in December 2017, the same month it reaped a huge financial windfall via the passage of the tax bill
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Over the past five years, AT&T has eliminated more than 12,000 CWA-represented call center jobs, representing 30% of its call center workforce.
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During that period AT&T closed more than 30 American call centers and downsized others.
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Meanwhile, AT&T has ramped up its presence overseas and currently contracts with a network of at least 38 vendor-operated call centers in 8 countries: El Salvador, Mexico, Dominican Republic, Philippines, Columbia, Costa Rica, Jamaica, India, and Canada.
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Many of these are low-wage countries with weak labor protections and inadequate legal enforcement mechanisms
