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Call Center Outsourcing And Its ‘Outsourced’ Moments

|Includes:ACN, IBM, Xerox Corporation (XRX)

By Audrey B.

Call center services are a mainstay in the outsourcing industry, thus it is hardly surprising that when broadcasting network, NBC, released the pilot for Outsourced, the show that it terms, ‘at once reverent and irreverent’, it featured the call center setting with the premise of the story being that the US order taking call center was moved offshore into India.  But while the plot of the show Outsourced is purely fiction, latest news among call center outsourcing companies do remind us that, no matter how loosely, Outsourced is still based on real life.

On the 26th of October, Nashville based call center outsourcing company, Sitel, announced that it will be laying off about 300 workers from its site in Erwin, New York.  The company opened its Erwin customer care center facility back in 2008, after the Empire State Development (NYSE:ESD) granted Sitel with $1.5 million plus $750,000 from the Governor’s Office for Small Cities.  Sitel’s Vice President, Andrew Kokes advised that the layoffs were due to unforeseen circumstances attributed to the loss of a major client of the company.  “We lost one of our clients and the reduction is not a reflection of the service delivered by the employees,” he said.

On the same day however, the company also announced that they would be hiring at least 80 more people for its call center in the city of Las Cruces, New Mexico, citing that the recruitment drive the company will be undertaking to hire the 80 people would be in support of its growing client portfolio.  Sitel Site Director John Munoz further adds that, “We also expect continued growth through 2011 as we anticipate a new client’s business to Sitel’s Las Cruces call center.”

Just a few days later on the 29th of October and Sitel once again announced hiring plans, this time to hire as much as 4,000 new contact center agents to provide customer service support, on top of the existing 12,000-strong workforce that the company currently employs in the Philippines.  According to Sitel Philippines, “Sitel has posted an increase in revenue and clients in 2010 which enabled the company to hire more people. We have new clients who went onboard this year and many of our existing clients have grown their businesses with us.”

Sitel is not the only one to be doing layoffs and hiring however.  Xerox (NYSE:XRX) subsidiary ACS also announced that they are laying off about 60 people or 1% of its 6,000-strong workforce in the Philippines.  The company announced on the 18th of October that the layoffs are because a number of positions within the company had been deemed redundant.  The company termed the positions “redundant and superfluous” thus they are abolishing said positions.

And although the company will be bidding farewell to 60 of its people, it announced on the 27th of October that is gaining 450 more, this time in Colorado, where the company already employs around 1,600 people.  This is days after the announcement that it is hiring 325 people in Kentucky on the 20th.

But perhaps the news that really brought to mind the show Outsourced is the recent news in the Philippines that its airline flag carrier, Philippine Airlines, is currently drawing fire from its employees for its “survival plan” which involves laying-off 600 employees and outsourcing job functions including outsourcing staple, call center services.  A scene that particularly comes to mind is when disgruntled employees were throwing bricks with threats inside the office building especially since workers of the airline are now on strike.

One thing though that the outsourcing industry has been able to prove is that it is a resilient business.  Many outsourcing companies are opening and expanding, especially in the call center space.  Case in point is Indian outsourcer Bharti Airtel (NSE:BHARTIARTL) who announced on the 25th of October that it is partnering with fellow outsourcers, IBM (NYSE:IBM), Tech Mahindra (NSE:TECHM) and SPANCO (BOM:508976) to create new call centers in Africa.  While Accenture (NYSE:ACN) just won a new contract on the 1st of November to provide among other services, call center support training to Olympus Memory Works.

Thus, while one door may close, another door is bound to open, otherwise, it might have been a window and you might not have been looking.

Disclosure: "No positions"
Stocks: XRX, IBM, ACN