US Labor Force decline 1990-2018.

Wise Virginia Call Center Won't Hire 500 New Workers

by Lewis Loflin

See Three Decades of Job Losses in Southwest Virginia

How can a company fire hundreds of workers down the road then claim new jobs at the same time? In particular a location riddled by previous layoffs. At best these are rehires.

Southwest Virginia politicians are celebrating the opening, supposedly, of the new call center in Wise, Virginia.

Their own economic development reports claim we shouldn't be dependent on call center jobs, but that is all we seem to get. Something called Frontier Secure will get the handouts, while public officials are somewhat vague on what jobs will actually be created. What is disturbing is their attitude towards local college graduates. Some say 50.

Update: the bastard employer Sykes is behind this as they layoff thousands of workers. To quote:

VCEDA: Sykes acquisition of Frontier Secure will not affect VCEDA loan payment

Posted by: BJournal Admin Posted date: June 09, 2017 Sykes Enterprises acquisition of Frontier Secure, formerly a division of Frontier Communications, will not affect the repayment of the $5.6 million Virginia Coalfield Economic Development Authority loan that had paved the way for Frontier Secure to open its Wise, Va., call center last year, according to VCEDA’s executive director...

In May, help wanted ads for the Frontier Secure locations in Deland, Fla., Lindon and Provo, Utah and Wise all ended with the disclaimer, "This position will be transferring from Frontier to SYKES Enterprises, Inc. on June 1, 2017." On June 2, those ads were replaced with the statement, "We apologize for the inconvenience, but this position’s status has recently changed. Please select another position to apply to." At the same time, Sykes had added Deland, Linden, Provo and Wise to its online list of sites.

In a May 8 press release announcing Sykes' Q1 financial results, Sykes listed the purchase price of its April 24 acquisition at $7.5 million, which is slightly less than 10 percent of the revenue generated by those assets..

The Virginia Coalfield Economic Development Authority (VCEDA) claims call center jobs pay $11 an hour.

To put $11 an hour into perspective $1.60 was minimum wage in 1970 adjust for inflation is $10.46 in 2018.

According to studies by King University in Bristol call center jobs typically pay about the same as an unskilled retail or nursing home job. A typical mining job returns $127,595 in household income, while a call center job returns $27,000. It takes approximately 4.7 call center jobs to replace the household income of a single mining job. This is based on the ripple-effect through the entire local economy.

Wise, Virginia is home to University of Virginia at Wise campus. In nearby Big Stone Gap Virginia is Virginia Highlands Community College. This so-called call center will be working with local colleges to secure their workforce. This is completely absurd! Who is going to get a college degree for $8-$9 an hour job? This is a particular problem with Clinch Valley College a.k.a. UVa Wise, where students can incur tens of thousands of dollars in debt. Being that most of their liberal arts degrees are useless anyway, they certainly can't afford this kind of low-paying employment.



Yet VCEDA and others built a $25 million facility for Sykes a 10 years ago. Stabbed in the back again.

Warn Notice for Sykes Enterprises, Incorporated
Notice Date: 01/04/2016
Impact Date: 03/04/2016
Employees Affected: 184
Sykes Enterprises, Incorporated
Vansant, VA

Then:

Sykes Enterprises to lay off nearly 200 employees in Buchanan County July 03, 2019 VANSANT, Va. (WJHL)- Sykes Enterprises will soon lay off nearly 200 employees in Buchanan County, Virginia.

According to a WARN notice, the company will lay off 197 employees from a call center located in the Vansant community in early September. The Tampa-based company is a "digital marketing and customer service global outsourcer"...

They claim to have been at the site for 10 years. Ref. www.wymt.com

Total for Vansant: 384. Good going VCEDA. See Tobacco Commission Sykes Fiasco Reveals Government Waste.

What is typical is one call center follows the other hiring and firing often the same people. At this location 2,140 layoffs from 2 companies including our buddy Sykes.

SYKES call center cuts 640 Boise workers, asks police to be present July 5, 2018...The layoffs occurred right before the Independence Day holiday...
SYKES in Boise handles customer service contracts with several companies, including Google's Nest, Expedia and Capital One...Boise Police had a presence at the call center on Chinden Blvd. during the layoff process...An unrelated call center formerly housed in the same building, operated by Maximus, saw a lay off of more than 1500 people in 2015. According to WARN Act filings with the Idaho Department of Labor, this is the largest layoff in the State of Idaho since the Maximus cuts in 2015.

Ref. boisedev.com

Sykes warns state of 179 layoffs in nearby Kentucky.

A Hazard Herald Staff Report Jul 3, 2019

Sykes has notified the state that the company will be laying off a total of 179 employees. According to the Kentucky Career Center Office of Employer and Apprenticeship, the company filed the notice July 1 that it would be laying off nearly half its workforce. According to the Kentucky Cabinet for Economic Development, Sykes, established in 2007, is a banking services support center/inbound call center which currently employs 375 people.

Then this Ref. www.bizjournals.com another 200 Sykes layoffs.

Sykes cuts Lakeland seasonal workers early. Nov 27, 2018 Hundreds of seasonal jobs will be cut early at the Lakeland Sykes Enterprises Inc. call center...A spokeswoman from Sykes (NASDAQ: SYKE) said the company will enact the layoffs on Dec. 1. The seasonal employees were set to work until Dec. 31..the Lakeland Ledger reports it is 200.

Sykes Enterprises laying off 600 in North Carolina Ref. www.wraltechwire.com.

Sykes Layoffs hit 600 plus at 3 sites in Fayetteville, Henderson, Goldsboro by North Carolina Business News Wire — May 30, 2018...The layoffs will take effect July 7. Among the employees being terminated, Sykes stated that 336 are customer service agents, and 15 are team leaders.

Then Ref. buffalonews.com another 89 layoffs.

January 26, 2018: Sykes Enterprises, a Tampa, Fla.-based operator of call centers, is closing its Amherst location and laying off its 89 workers there, effective March 31, according to a notice filed with the state Labor Department that was made public this week...The notice said Sykes is closing the non-union facility for economic reasons. This is the third of three WARNs, or Worker Adjustment and Retraining Notifications, the company has filed since May.

More:

Sykes closing call center in Upper Macungie, affecting 96 workers FEB 01, 2018. Sykes Enterprises Inc., a global business process outsourcing firm, is closing its call center in Upper Macungie Township, affecting 96 employees, according to a Worker Adjustment and Retraining Notification Act notice filed this week with the state...all 96 employees will be offered the opportunity to work from home, though it’s unclear at this time how many people will accept the offer.

Ref. kval.com

Sykes call center plans to close, leaving more than 400 without jobs by KVAL September 9th 2016 EUGENE, Ore. – The Sykes call center is closing in downtown Eugene and 400 people are looking for a new job...Just three years ago, Sykes opened in Eugene...In 6 weeks, the call center and its 418 employees will all be gone.

In a study from 2001 with LENOWISCO (meaning the Counties Lee, Wise, Scott, City of Norton) noted of call centers which several brought in since that time have moved on:

The region is doing slightly better than state and national averages for high school graduates. However, the area lags both college categories, with a notable lack of college graduates (including advanced degrees), which is probably related to the lack of appropriate jobs in the region.

The lower figure for "Some college" (includes no degree and two year degree) is a potential danger signal. As manufacturing jobs are moving offshore, the new jobs being created generally require some college education and a higher degree of technical skill than the jobs being replaced.

The region has been replacing traditional manufacturing jobs with call center jobs, which provide limited advancement and work opportunities. Call centers represent the factory floor of the Knowledge Economy; they are an important part of a diversified economic development strategy, but the region must be careful not to rely too heavily on them, as the work is easily moved to other regions and/or other countries.

See lenowisco_broadband.pdf

This nonsense is supposed to attract and retain college graduates? I hasn't in the past.

While the report is dated it's useful to see what the goals were then and what we have today. Most areas of Southwest Virginia do have affordable broadband, but this is more like a cable company or utility. This has been tried across large swaths of rural America to revitalize local economies and there's no proof anywhere it works.

Typical was the hype surrounding Northrop-Grumman opening an "IT" center in Russell County, Virginia. There's no evidence of any real job creation and there were complaints they paid less than a nearby call center. This was a government outsourcing contract project that ended up being a help desk call and data backup center they claim, while the 700 IT jobs we were promised I think were outsourced to India. I know people that had IT degrees who never could get a job there and their parking lot stays largely empty. I went to their job fair held in Abingdon Virginia several years ago (paid for by taxpayers) and found out the $57,000 a year jobs they promised paid on average $27,000 depending on experience - when I could wring the information out of their representatives. Who in the heck was going to move in the middle of nowhere and take a 50% pay cut?

There was never any intention of hiring 700 IT workers - this was part of then Gov. now Senator Warner's effort to lure Grumman into relocating to Northern Virginia. They had never even been involved this kind of IT business before and screwed up to the point now Virginia Congressman Morgan Griffith tried to get their contract terminated.

As for today to quote the press, "a job fair will be held at UVa Wise Convocation Center on July 8-9 to hire the first 50 people". There is no timetable for guarantee of any additional jobs. $5.6 million of the $7.6 million is supposed to be a loan, but going by past experience will never be paid back. The center will be opening August 14, 2016. I'll bet the taxpayers will fund that event too. That new Convocation Center cost $30 million.

The question becomes, what happened to the Sykes call center in Wise? We were promised 500 jobs with this fiasco that never materialized. Many of those workers that they did hire have been laid off. Then the taxpayers built another $25 million industrial park centered on another Sykes call center in Buchanan County Virginia. That has proven to be a fiasco. Sykes was terminating its Wise County employees at the same time hiring new workers in nearby Buchanan County.

See Tobacco Commission Sykes Fiasco.

That's not counting the Travelocity fiasco that claimed 550 new jobs yet never hired over 230 then closed down. $10 million down the toilet.

These will not be new jobs all, but rehiring laid-off Wise Sykes and Norton, Virginia relay center employees. These "new hires" will be earning less and be entry-level employees.

There's no way to really track if any people will be actually employed. The Virginia Employment Commission sensors such information - even the schmucks handing out the grants aren't allowed access. Thus there is no way to find out anything until too late. Ref. BHC June 30, 2016.

Return History, Causes of Poverty in Southwest Virginia




To quote Lenowisco Broadband Study Warned against Call Centers (PDF file):

"The region has been replacing traditional (better paying) manufacturing jobs with (low paying subsidized) call center jobs, which provide limited advancement and work opportunities. Call centers represent the factory floor of the Knowledge Economy; they are an important part of a diversified economic development strategy, but the region must be careful not to rely too heavily on them, as the work is easily moved to other regions and/or other countries."
No US Job Creation 1999-2009

Lenowisco Broadband Study Warned against Call Centers (PDF file)

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