Sykes Enterprises announced this week that it will close its call center in Nogales, a move that will send more than 100 workers into an already stressed local job market.
Robert Castelan, employment service manager for the local Department of Economic Security office, sighed and then buried his head in between his hands when he learned of the closure on Wednesday afternoon.
“Oh, God. Don’t tell me this. That’s not good news,” Castelan said in response to news that one of the county’s biggest employers was leaving town.
Losing the Sykes call center, which provides technical support and customer service for Fortune 1000 companies, is a huge blow to the area, Castelan said. The outsourcing company, rivaled in its number of employees only by Wal-Mart, Nogales’ school system and the federal, city and county governments, has been a jobs titan in town for the past decade.
The call center, which was then operated by ICT Group Inc., came to Nogales in 2002. In 2009, Sykes acquired ICT.
“There’s nothing of this magnitude I can recall,” Castelan said. “There have been layoffs here and there. The JC Penney downtown or Anna’s Linens. Small business. But nothing as big as this.”
Sykes spokeswoman Andrea Burnett Thomas said although the company announced the plan to close its Nogales office this week, the process has been in the works for a while.
On Nov. 30, 2011, the company filed an 8-K form with the U.S. Securities and Exchange Commission. The form, a current report of sorts, informs shareholders of any big changes within the company.
The company planned to “rationalize” about 1,200 positions in the U.S., according to the form, “as part of an on-going effort to streamline excess capacity related to the integration of the ICT acquisition and align it with the needs of the market.”
Sykes is also closing an office in Louisville, Ky., Thomas said, which, like the Nogales office, used to be run by ICT.
Castelan said this week’s news only exacerbates the county’s already bleak jobs outlook. “There’s a lot of people looking for work already,” he said.
The county’s unemployment rate – which is typically one of the highest in the state – fluctuated throughout the year, but ended up about where it started, between 15 and 16 percent, according to Arizona Department of Administration data. Things were the worst in August, data shows, when 18.2 percent, or 3,420, people, were unemployed.
And, you can expect that rate to increase in coming months as former Sykes employees trickle into Castelan’s office.
Sykes employees contacted by the NI said they had been instructed by the company not to speak publicly about the closure, though they said they had been notified of the closure and that it would be completed by the end of April.
‘Little by little’
Burnett Thomas, the company spokeswoman, declined to provide the number of positions that Sykes will shed in Nogales. Mayor Arturo Garino, who called the loss of Sykes “very unfortunate and sad,” also didn’t have an exact number. But he said he knows more than 100 locals will lose their jobs once the call center shuts down.
Even still, there was a time when closing the call center would have impacted the area more severely.
During the call center’s heyday about a decade ago, ICT expanded the scope of its operations in Nogales, touting the lure of the area’s large pool of bilingual people, and employed about 700 people.
“In the past 10 years or so they’d been losing people little by little,” Garino said. “There were just a little over 100 employees left. That’s the amount of people who are going to lose their jobs.”
Garino said he and City Manager Shane Dille recently reached out to Sykes’ corporate offices “to see what we as a city could do to help them out” and “to see if we could come up with a solution.”
But, the city got an email from corporate on Wednesday. The crux of the message, as Garino put it: “They had made their decision and there was nothing we could do.”
As for Castelan, his powder blue shirt puckered a bit as he lifted his hands behind his head and rested it in them, still trying to process the news. He stared blankly past his computer screen and shook his head as he repeated a mantra of sorts.
“Wow, wow, wow,” he said. “That’s a lot of people. Wow.”