Major call centre says goodbye

Hey there, time traveller!
This article was published 30/03/2010 (5699 days ago), so information in it may no longer be current.

THE city’s largest call centre is going dark, signalling the end of an era for the business in Manitoba.

Convergys Corp. is closing its Winnipeg customer contact centre at the south end of the city in a building that once, briefly, housed Nortel operations.

At one time, the Cincinnati-based company employed as many as 2,200 people in Manitoba, including its former operations in Brandon and represented more than 20 per cent of the province’s call centre jobs.

Company officials refused to comment Monday, but it is believed the closing will throw about 500 people out of work.

The company had been gradually reducing the size of its Manitoba workforce for many months.

The only communication the company provided on Monday was to reiterate its early December statement regarding its intentions to close Winnipeg operations at the end of this month. At the time it said, "The decision is the result of current economic conditions, which has led to a decrease in call volumes at the site."

While call volumes may be down at its Winnipeg site, the company is clearly experiencing good business at its overseas locations.

On Monday, the company issued a statement, datelined Cincinnati and Manila, about an award it received in the Philippines where it is now the largest private employer in that country.

Convergys opened five new sites in the Philippines in 2009 and now has more than 20,000 employees there.

Cheryl Barsalou, executive director of the Manitoba Customer Contact Association, said there is a trend in the industry to move more business to lower-cost offshore locations.

"There are lots of Canadian centres closing," she said. "Convergys is a U.S.-owned company and most, if not all, its business was with U.S. clients. There is a strong trend in the U.S. where there is a lot of offshoring going on."

There was dramatic growth in the call centre business in Canada 15 to 20 years ago that was mostly fuelled by what was then a 65-cent Canadian dollar. With the loonie flirting with parity with the U.S. greenback, that cost advantage of doing business in Canada is evaporating.

"How can Canadian companies compete with labour costs of $2.75 per hour (in some Asian countries)," Barsalou said. "That’s a big hurdle."

Steve Higgins, president of locally owned S R & J Customer Care Call Centres Inc., said the recession has cut business and there are many centres closing across North America.

But while business may be off, he said Convergys is also aggressively cutting its costs by moving overseas. The company also has large operations in India and China.

"My feeling is that once the U.S. pulls out of recession and the growth starts happening again, it could be very good for call centres in Canada mainly because of reduced capacity, because there have been so many closures," he said.

Both Barsalou and Higgins said there has been backlash in the past regarding the quality of work being done overseas and work has been repatriated in the past.

But the trend is definitely towards Asia rather than the other way around. Last week, Convergys also closed a call centre in Killeen, Texas, that had been open since 1995 and at one time employed 650 people.

Barsalou said the industry may shrink more before a recovery can take hold, but she said the Winnipeg sector has some stability thanks to dedicated Winnipeg call centres run by MTS Allstream, RBC, and other local operations like Great-West Life, Manitoba Hydro, Blue Cross and the city’s 311 call centre.

martin.cash@freepress.mb.ca