Posted on 01/06/2004 9:38:41 PM PST by 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.
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!
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.
Yep, tell 'em how great you are as you flush your service down the toilet.
LOL. Stone age technology just like GM?
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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 ACTIONWhy 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. . .
Contact information for Earthlink.net: Sincerely, Donald E. Wildmon, Chairman You are subscribed to pledge as [my address. Click here to unsubscribe. |
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Don't blame you; don't blame me. Blame the executive behind the tree.
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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!?
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