EarthLink to cut jobs by 39%

Atlanta Journal-Constitution ^ | 01/07/04 | Bill Husted

[Holly_P]

About 1,300 of EarthLink's 3,300 employees learned Tuesday they will lose their jobs by late March in a dramatic work force reduction by the Atlanta-based Internet provider.

The 39 percent work force reduction comes as EarthLink closes call centers across the country. Those centers handle customer service and technical support calls from EarthLink subscribers -- duties that will be shifted almost entirely to outside companies, located both in the United States and overseas.

In Atlanta, the company's call center will keep a small number of employees, but more than 300 jobs will be lost. Even so, Atlanta will continue to have the single largest concentration of EarthLink employees, with about 1,000 remaining after the job cuts.

Outsourcing customer calls is "part of a larger trend across the industry," said Jeff Kagan, a telecommunications analyst in Atlanta.

"This is the kind of move that Wall Street applauds because it cuts costs, but that doesn't mean it's always a good move for customers," Kagan said.

Speaking as a longtime EarthLink customer, Kagan expressed concerns over the company's ability to provide good customer service.

"It was an oasis of quality" when it came to customer service in the early days, he said. "I've noticed a definite change over the past few years, and not for the better. ... I guess it is as simple as, they're not as good now."

For Charles Brewer, the Atlantan who founded MindSpring and then merged it with EarthLink in 2000, news of the job losses and the shift to outside call centers "kind of hurts."

"And it probably hurts plenty of people who are at EarthLink now," he said Tuesday. "But I'm not in a position to say whether it is a good move."

Link to customers

Brewer, now chairman of Green Street Properties, said a reputation for personal customer service by MindSpring's call center employees created a direct link with customers.

"It would be hard to imagine how you could re-create that with a purely outsourced solution," he said.

EarthLink began restructuring last year as it moved away from using its employees to man call centers, shifting the task to outside vendors.

The company closed some call centers and trimmed 1,300 jobs at that time, the same number as Tuesday's cut.

The move to outside call centers will be complete by March 25, said Dan Greenfield, vice president for corporate communications. In some call centers, the job cuts will be made gradually, but all Atlanta workers are expected to remain until late March.

Greenfield said approximately 70 percent of all customer calls are already handled by outside vendors, including some overseas.

Call centers in California -- including those at Roseville, Pasadena and San Jose -- will close, as well as one in Harrisburg, Pa. Greenfield said EarthLink plans to take about $36 million in first-quarter charges connected with the move.

"This is a continuation of that strategy, and it's been a success," Greenfield said. "This is allowing us to serve our customers and to be efficient."

Asked if the company worried about customer reaction to the shift to outside call centers, Greenfield said: "It's not a concern. We are very confident that the transition will be seamless."

He said the restructuring will help EarthLink compete in the tough Internet provider market. It will also free up money for marketing, he said.

Employees were notified of the job cuts in a letter from the company's chief executive, Garry Betty, and through individual and group meetings.

Betty said cutting jobs is "the toughest decision that any executive has to make."

"It's entirely driven by efficiency and cost," he said. "We are making hard decisions that are necessary to ensure the ongoing viability of our company."

He noted that it costs twice as much to staff call centers as it does to farm the jobs out. He said the major overseas call centers for EarthLink are operated by firms in Manila, Philippines, and India.

Terminated employees will be able to compete for jobs within EarthLink, Greenfield said, though he doubted that any would be able to move to the outsourcing firms. He declined to be specific about separation packages that will be offered but said it is a "generous benefit package, that will include career counseling."

No savings specifics

Greenfield said specific cost savings amounts for EarthLink will come when it issues its first-quarter earnings figures.

"I'm not getting into specifics on cost savings," he said. "But I will say that the efficiency gained through this plan will allow us to invest in subscriber growth, which also will result in growth of earnings."

The $36 million first-quarter charge was not included in EarthLink's earlier forecast of 2004 net income of between $31 million and $63 million. Greenfield said it would now be accurate to reduce that range by $36 million.

Of the $36 million, $13 million is for employee-related costs, $14 million for lease termination costs and $9 million for non-cash asset write-offs.

EarthLink, the nation's third-largest Internet provider, is set to report fourth-quarter 2003 results on Jan. 29.

Its stock closed Tuesday at $11.05, up 3 cents, on the Nasdaq Stock Market.

[RaceBannon]

Make sure you keep repeating the mantra!

The problem is not jobs leaving the country, it is not capital equipment leaving the country, the problem is not intellectual property leaving the country, the problem is not contracts going to communistic/fascistic/socialistic government run countries that prop up their companies with government funds to defer losses that the US companies cannot compete against...

THE PROBLEM IS YOUR ATTITUDE ABOUT IT!! JUST KEEP TELLING YOURSELF THINGS WILL GET BETTER AND THEY WILL!

[Support Free Republic]

Without the support of Freeper donations, Free Republic would go belly-up, leaving guys like The French Gynecologist to be unopposed. And we can't have that!

[Freedom of Speech Wins]

Time for everyone to cut Earthlink.

If the company cuts their own and messes with the American worker like this, it should be eliminated.

Sad that the government won't impose any penalty on this type of coporate behavior.

[WSGilcrest]

I've been calling them every month for the last four months, threatening to cancel my DSL. They always ask why and I say that I'm going with SBC for half the price. They knock $25 off my bill to stay. now I can give them another reason to quit.

[DeFault User]

It will also free up money for marketing, he said.

Yep, tell 'em how great you are as you flush your service down the toilet.

[Holly_P]

I could have gotten 6 months free Earthlink or AOL when I bought my Dell. I told them I'd rather have a rock instead. the sales rep on the phone said "What do you mean a rock?"

I said, you know, a stone or a piece of gravel....Zinged right over his head.

[DeFault User]

I'd rather have a rock instead

LOL. Stone age technology just like GM?

[familyop]

Here's something I received in July (familyop).

A Special Project of the American Family Association

Did you know? Your ISP - EARTHLINK.NET - undermines the God-ordained institution of marriage & family.

Dear [My name was here.],

According to Gay.com, your Internet Service Provider (ISP) EARTHLINK.NET supports the causes of two major homosexual activists groups: The Human Rights Campaign (HRC) and The Gay and Lesbian Alliance Against Defamation (GLAAD).

To see what a portion of your Earthlink.net subscription fee goes to support, take a look at this Earthlink ad with Gay.com - "Wanna hook up?" - which has an obvious double entendre message about Internet service and sex.

Your subscription fees to Earthlink.net (and subsidiary ISP's MindSpring.com and OneMain.com) undermine the God-ordained institution of marriage and family.

The HRC, the nation's largest homosexual lobby, has a goal to gain marital status for men or women who have oral or anal sex with each other. Recent headlines from their website include the following: "HRC Lauds Ruling that Allows Same-Sex Couples the Freedom to Marry in Ontario, Canada" and "HRC Praises General Electric Co. and Unions for Adding Domestic Partner Benefits." HRC sponsored a 'Two Spirit' conference in the Washington, DC, area that included the following workshops: A transgender workshop teaching young girls how to have their breasts removed to become 'men' - An S&M workshop to show attendees how to effectively torture each other - A workshop on "Polyamory," or having sex with multiple partners.

TAKE ACTION

Why do business with a company that undermines your values? We suggest you consider changing your Internet service and then let Earthlink know why you switched. One company we recommend is AFO.net (American Family Online).

This full service Internet company provides all of the features of Earthlink plus extensive filtering to protect you and your family, and they will never sponsor or promote behaviors offensive to our Christian values. Plus, they are offering a 45-day FREE TRIAL just for Earthlink subscribers.

CLICK HERE to sign-up, or here to learn more about what AFO has to offer. They have many options to accommodate your needs. When you make the switch be sure to let management at Earthlink know why!

Here are some details. . .
AFO.net - Family Friendly Internet Service

• $21.95 Monthly
• 45-day free Trial for Earthlink (MindSpring & OneMain) Subscribers
• Cable, DSL and Satellite Available in Many Areas
• Web Filtering, Email Filtering and Email Virus Checking Included
• Family Friendly Links and Resources from the home page

Contact information for Earthlink.net:
Earthlink.net
1375 Peach Tree Street, Level A
Atlanta, GA 30309
Phone: 404.815.0770
Fax: 404-892-7616
Toll Free: 800-395-8410
URL: http://support.earthlink.net

Sincerely,

Donald E. Wildmon, Chairman
American Family Association

---

You are subscribed to pledge as [my address.
Click here to unsubscribe.

copyright © 2002-2003 American Family Association :: all rights reserved
contact webmaster with questions or comments

[Nick Danger]

• Sad that the government won't impose any penalty on this type of coporate behavior.
  
  
• They always ask why and I say that I'm going with SBC for half the price. They knock $25 off my bill to stay

Don't blame you; don't blame me. Blame the executive behind the tree.

[BrooklynGOP]

Oh, please! Internet access used to be pricey, now you got all these companies competing which drove the rates way, way down benefiting you - the consumer! And you are complaining?
Why don't you start up your own internet company, charge $20-$30 a month over what Earthlink charges and hire strictly American. We'll see how many american jobs you'll create.

[familyop]

at http://www.afa.net/earthlink.html

From: Gay.com Member Special [response@info.gay.com]
Sent: Tuesday, June 10, 2003 4:02 PM
To: response@info.gay.com
Subject: Enter EarthLink's "Get Connected, Stay Connected" Summer Sweepstakes!

* This offer is for new subscribers only. This offer cannot be redeemed in conjunction with any other offer. This offer is for dial-up Internet access only. Valid with major credit card orders only. This offer includes unlimited Internet access at the special rate of $10.97 per month for the first six months of service. Thereafter, the regular rate of $21.95 per month will apply. Offer ends 8/31/03. Access fees, taxes, and other fees and restrictions may apply.

© 2003 EarthLink, Inc. EarthLink and the EarthLink logo are registered trademarks of EarthLink, Inc. Trademarks are property of their respective owners. All rights reserved.

[BrooklynGOP]

ping!

[vger]

My Earthlink DSL took a dump last month and they told me that while they were trying to fix my circuit that Earthlink sales had sold my circuit to someone else. They explained that my circuit was the last one available in my village and I was just SOOL. I changed to the local Ma Bell DSL , which has better service, at half the cost. I also dont receive fifty + pieces of crappy SPAM everyday. Earthlink used to be pretty good but its accounts have been so SPAMMED up that's its just a pain in the a** trying to deal with it.

[First_Salute]

Not to mention how the limousine liberals pasted Kathee Lee and Frank Gifford for employing "slave labor," the same slave labor for which the limousine liberals' Goldman & Sachs accounts reap billions every quarter.

[CedarDave]

PING for the morning crowd.

[RiflemanSharpe]

Yet another dagger in the back of American workers. LIke how dare we want a decent middle calss lifestyle. we should be happy with sliding down to third world status. (SARCASM OFF)

[CedarDave]

Gross ad IMO.

My problem with using other providers is that first I travel all over the west for business and need local access numbers to get email, etc. If I stayed in one place changing to another ISP would be no problem. My second problem is that many other nationwide providers do not have a local ISP number for my community, including AFO. I'm probably stuck with Earthlink.

[BrooklynGOP]

Yet another dagger in the back of American workers

Look at post #5: I've been calling them every month for the last four months, threatening to cancel my DSL. They always ask why and I say that I'm going with SBC for half the price. How dare he choose a cheaper provider?! Does he realize that he's driving prices down and thus the wages of the american worker!?

[AxelPaulsenJr]

At Gay.com you always get what you want in the end.