Compiled by Lewis Loflin
The Virginia Tobacco Commission allocated $25 million to establish a call center operated by Sykes Enterprises in Vansant, Buchanan County, Southwest Virginia (SWVA), as part of an economic development initiative in the early 2010s. The project aimed to create 400 jobs but faced challenges, including the downsizing of a nearby Sykes facility in Wise County and subsequent layoffs in Vansant. Public records from the Commission’s hearings highlight concerns about transparency and the accuracy of employment data. This analysis examines the outcomes of the investment, the Commission’s processes, and the economic impacts on SWVA as of 2025.
The Tobacco Commission invested $25 million in the Southern Gap industrial park in Buchanan County, with Sykes Enterprises as the primary tenant, contributing $6.4 million to the project. The facility, located along Route 83—a road without four-lane access—was intended to create 400 jobs. According to Virginia Employment Commission (VEC) data presented in a Commission hearing, employment at the Vansant facility increased by 245 workers over a year, while the Sykes facility in Wise County, approximately 1 hour 35–40 minutes away, saw a decrease of 199 workers during the same period.
The Tobacco Region Opportunity Fund (TROF) contract stipulates that incentives cannot be awarded for relocating jobs within Virginia, requiring a net increase in statewide employment. Commission members debated whether the job gains in Vansant were offset by losses in Wise. Senator Puckett noted the distance and low wages ($8–$10/hour at the time, equivalent to $12–$15/hour in 2025) made it unlikely for workers to commute from Wise to Vansant. However, Mr. Stephenson suggested that Sykes may have shifted work between locations without relocating employees, a possibility the VEC could not confirm due to limitations in tracking employee locations. By 2019, Sykes laid off 197 employees in Vansant, as reported by WCYB (July 3, 2019), following a 2016 WARN notice of 184 layoffs (effective March 4, 2016).
The Commission’s hearing minutes provide insight into the Tobacco Region Opportunity Fund (TROF) program’s performance. Of approximately 350 TROF transactions, 40% did not proceed to completion, often due to projects failing after initial approval. Of the projects that received funding, 50% met their commitments, while the remainder either repaid funds, negotiated adjustments, or failed to meet obligations. Mr. Ferguson explained that TROF grants are typically approved in closed sessions or by small committees, limiting public oversight. Additionally, TROF approvals include a clause requiring Commission authorization for any public announcements, further reducing transparency. These practices made it challenging to verify employment outcomes for projects like Sykes, as the company was not a direct party to the TROF contract.
The Vansant project resulted in a net employment gain of approximately 120 jobs (245 added in Vansant, 199 lost in Wise, adjusted for subsequent layoffs), equating to a cost of $208,000 per job based on the $25 million investment. The Southern Gap industrial park has not attracted additional tenants beyond Sykes, according to Mr. Horn, limiting its economic impact. Ms. Carter noted operational differences between the Wise and Vansant facilities, with Wise focusing on scripted, high-security contracts requiring extensive background checks, while Vansant’s operations were less restrictive. She also referenced Sykes’ acquisition of a company adding 30,000–35,000 global jobs (likely the 2016 Qelp acquisition or 2021 Sitel merger, forming Foundever), suggesting satisfaction with the SWVA workforce. However, the layoffs in Vansant and the eventual closure of the Wise facility by the late 2010s indicate challenges in sustaining employment.
In 2025, SWVA’s call center sector is limited, with only EarthLink in Norton and a few jobs in Scott County remaining. The region’s information sector declined by 45% from 2010 to 2020, compared to a 2% national increase, reflecting broader economic difficulties. Population declines of 3–5% in counties like Buchanan since 2010 and an annual outmigration of 8,000–10,000 college graduates further highlight the region’s challenges.
The image above shows the population decline in Southwest Virginia from 2010 to 2018, a trend that has continued into 2025, reflecting the region’s economic challenges and limited job opportunities following initiatives like the Sykes call center project.
A 2005 LENOWISCO study provided context on the region’s reliance on call centers: “The region has been replacing manufacturing jobs with call center jobs, which provide limited advancement...easily moved to other regions and/or countries.” It also noted offshoring risks (Asia’s $1–$5/hour wages), low-skill reliance (~30% no high school diploma, 2003), and firms leveraging subsidies, such as VCEDA’s $5.6 million for Sykes. Non-unionized sites lost ~2 million U.S. jobs by 2015, unlike AT&T’s protected workforce. Educational challenges—~50% lacking a high school diploma in Dickenson County (2008)—further limited the region’s ability to sustain such employment. LENOWISCO Study, sullivan-county.com
| Sector | SWVA (% Decline) | USA (% Change) |
|---|---|---|
| Arts, Ent., & Rec. | -20% | 6% |
| Wholesale | -25% | 3% |
| Construction | -35% | 24% |
| Information | -45% | 2% |
| Mining | -50% | -11% |
Notes: Excluding mining, SWVA experienced declines in sectors that grew nationally. The region’s mining sector decline exceeded the national average. A total of 10,451 jobs were eliminated across these five sectors, with 16,774 jobs lost when including national mining sector declines between 2010-2020. The 45% decline in the information sector persists despite an estimated $200 million in public investment, likely exceeding $300–$400 million, with significant data withheld.
Ref: Zach Jackson, Virginia Tech
Updated 4-17-2025. From 2002 to 2025, Southwest Virginia (SWVA) faced significant economic challenges despite substantial public investments in broadband and call center initiatives, as detailed across multiple webpages. Congressman Rick Boucher promoted call centers to bring tech jobs, but efforts like the 2010 DIRECTV virtual call center (100 jobs) and earlier projects (e.g., Results, KCG) largely failed, with many closing by 2013, nearly all by 2020. Bristol Virginia Utilities (BVU) deployed the OptiNet fiber network, receiving $100 million in public funds, including $3.9 million in 2009 for expansion. Despite a 2009 "Intelligent Community" ranking, BVU’s initiatives, including support for Northrop Grumman and CGI-AMS, produced only 200 jobs by 2011 against a promised 1,000, and call centers paid low wages ($8.50–$11/hour). Economic indicators in 2025 show a 45% information sector decline, 60,000+ job losses since 2009, and a 7.5% population drop in Russell County (2010–2018), with wages ($17.33/hour in Bristol MSA) below living standards, highlighting the region’s persistent struggles.
The Virginia Tobacco Commission’s $25 million investment in the Sykes Enterprises call center in Vansant resulted in a net employment gain of approximately 120 jobs, at a cost of $208,000 per job, before layoffs in 2019 and the closure of the Wise facility. Public records indicate challenges in verifying employment outcomes due to transparency limitations in the TROF program, with 40% of projects failing and 50% of disbursed projects underperforming. The LENOWISCO study’s observations on call center instability remain relevant, as SWVA continues to face economic decline and outmigration. This case highlights the complexities of economic development initiatives in the region. Compiled April 16, 2025.
Acknowledgment: I’d like to thank Grok, an AI by xAI, for assisting in drafting and refining this article. The final perspective and edits are my own.
