Comcast to close all California call centers

The Sacramento BeeSeptember 26, 2012 

— In an abrupt announcement that caught state and local business officials off guard, cable giant Comcast announced Tuesday that it's closing all of its California call centers, including one in Natomas that employs about 300 workers.

Why? That's the tricky question.

Earlier in the day, citing the state's "high cost of doing business," a regional Comcast official said the company's Natomas, Livermore and Morgan Hill call centers will be shuttered on Nov. 30. Overall, about 1,000 jobs will be relocated to existing centers in Portland, Seattle and Denver.

But hours later, after state Senate President Pro Tem Darrell Steinberg, D-Sacramento, and the Governor's Office interceded, Comcast backtracked, saying its initial reasons were "incorrect."

Instead, it said the California closures were needed for cost efficiencies and to consolidate its Western call centers from 13 to 10, based on customer needs, "rather than geography." It noted that many customers rely on self-help and online tools to handle their service questions, which meant it doesn't need as many call centers as in the past.

That turnaround was greeted warmly by the Governor's Office.

"It is unfortunate that Comcast's announcement to eliminate jobs in California inaccurately placed blame on the state, but I am pleased to see the executives at Comcast taking responsibility and correcting the statement," said Mike Rossi, the governor's senior adviser for jobs and business development, in a statement.

The governor's involvement came after Steinberg issued a personal invitation to Comcast executives to meet "to outline their issues and discuss what my office and the Legislature might do to resolve their concerns." Pending a meeting, he urged Comcast executives "to reconsider their actions."

Steinberg said he was "puzzled and extremely disappointed" that Comcast representatives had not contacted his office, which represents the Natomas area, until after making its public announcement.

Comcast did not immediately respond to Steinberg's invitation.

On Tuesday morning, the company informed employees of its North Natomas call center at 4450 E. Commerce Way about the pending closures. Those who wish to relocate to Oregon, Washington or Colorado will have the option; otherwise severance and job assistance will be provided, the company said.

Local business leaders expressed equal dismay and surprise over Comcast's decision and its reference to the state's business climate.

"Whenever we hear a company talking about having a difficult time doing business in the region (or) the state, we'd want to put together a team and go meet with them and resolve the problem," said Robert Burris, senior vice president of SACTO, a regional business and economic development group. "Unfortunately, in this case, we didn't get that opportunity."

Roger Niello, a former state assemblyman who heads the Sacramento Metro Chamber, said there'd been no indication that Comcast was thinking of pulling up stakes.

When the company first issued an email statement about the pending closures, regional vice president Andrew Johnson said "the high cost of doing business in California makes it difficult to run cost-effective call centers in Northern California."

The company declined to be more specific but referred reporters to three studies critical of the state's business environment.

Later the company issued an unsigned statement saying its earlier comments were erroneous. It said Comcast, whose holdings include NBC Universal, has more than 20,000 employees in California and is committed to hiring and investing in the state.

But various business groups were quick to jump on the notion of California's inhospitable business climate.

Niello cited high income tax rates, regulatory barriers, nuisance lawsuits and wage/hour restrictions that discourage companies from starting or staying here.

Call centers have had an episodic existence in the Sacramento region.

"These centers are expanding, contracting, coming and going in very short cycles of time," said SACTO's Burris, who called it a "fluid environment."

A decade or so ago, the Sacramento region was a call-center hiring hub, with at least 15 large companies like AT&T, Bank of America and Wells Fargo running operations of 100 employees or more, said Terri Carpenter, spokeswoman for the Sacramento Employment and Training Agency.

But over the last few years, "with the economy and outsourcing, they have slowly and surely consolidated," moving to out-of-state locations, "just like Comcast," she said.

Other call centers including E-Trade and Providian Financial Corp. have closed in recent years.

Today, Carpenter said, there are only a handful of large call-center employers left in the area, along with a number of smaller customer service operations.

She said the remaining call centers – including Gap Inc. in Rocklin and Verizon and Progressive Insurance in Rancho Cordova – are hiring. On job websites like Indeed.com, she noted, there are currently more than 430 call-center job postings in the greater Sacramento area, from a handful to 50 or more openings for full-time or seasonal workers.

Earlier this summer, Advanced Call Center Technologies LLC announced it was adding a second call center operation in North Highlands, where it expects to hire 500 workers by December and up to 2,000 over the next several years.

New Jersey-based corporate siting consultant John Boyd said a number of factors make California a less-than-ideal location for call centers, including labor costs, mandated training and high industrial kilowatt prices.

In general, he noted, the call-center industry "is really going through a revival" as companies pull back from decades-ago experiments with offshore and overseas call centers. That means competition from communities across the country seeking to lure jobs to their region.

He said other states, like Washington and Oregon, have re-engineered their tax codes to be more competitive, including sales tax exemptions for purchases of large data storage equipment.

"That would never happen in California," he said.

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