Dell’s promise that the closure of its Edmonton contact centre and layoffs at its Ottawa facility this week won’t affect customers may be a difficult one to keep, an analyst said Thursday.
More than 900 employees will be affected and offered other jobs within Dell or severance and career placement services following the closure of the Edmonton facility, which Dell first opened in 2004. Customer support will be consolidated in other existing Dell locations, execs added in a statement.
Dell’s remaining 25 contact centres include locations in Germany, India and the Philippines, among other areas.
Dell spokesman Jess Blackburn indicated the remaining contact centres would be able to handle the extra support chores.
“It’s not so much a case of staffing up but (making) better efficiency,” he said. “I can’t say specifically where calls that previously would have done to Edmonton will be landing, but really this is resulting from looking over the past year or so at ways we could improve the way we work without degrading any customer service in the process. That’s absolutely a concern and has been considered.”
Mark Tauschek, an analyst with London, Ont.-based Info-Tech Research Group, suggested economics had a role to play along with Dell’s company-wide mission to reduce its workforce by 10 per cent.
“One of the reasons they chose Canada when they did decide to put a significant customer support footprint in place was that it was fairly cheap in Canada,” he said, citing outcries of poor support from Dell’s offshore operations. “They won’t come right out and say it, but the strong Canadian dollar and weak U.S. dollar has changed that model.”
Dell announced the Edmonton contact centre to great fanfare four years ago, when the city government agreed to offer tax credits over a five-year period and through a 20-year-lease on a parcel of land for a dollar per year.
The government first contacted Dell about the possibility of opening a contact centre in Canada through the Department of International Trade’s consulate in Dallas Tex., not far from Dell’s Round Rock headquarters. After the initial contact Alberta Economic Development Corp. made a proposal, which was followed up by Edmonton Economic Development Corp.
Canadian Press reported Dell is also cutting jobs in its Ottawa location, which company president Michael Dell visited last year as part of a Canadian visit. Dell has not confirmed how many positions have been eliminated in the capital city.
“You can’t lose 900-plus in Edmonton and however many people in Ottawa and not have it impact your ability to support your customers,” Tauschek said bluntly. Although Dell has announced plans to ramp up a channel program, Tauschek said many of the more successful resellers are already loyal to HP.
Blackburn said Dell wouldn’t be recruiting any extra partners to help offset the Canadian job cuts.
“We are developing our channel strategy and working with partners but the two are not associated,” he said.
Last year, Dell had said it would double the staff at the Ottawa call centre about a year ago from 1,500 to 3,000 people. Dell had even gone so far as to build a new 150,000 sq. ft. building to accommodate its growing Canadian staff, but it will remain empty.
Dell Canadian headquarters is in Toronto but it also has offices in Montreal and Edmonton.