Alorica to Close Mendota Heights Call Center Laying off 158 CWA Members

California based Call-Center Alorica announced today that it would close a Mendota Heights, Minnesota call center in March 2020, laying off 158 workers in the process. 

CWA local 7250 President Shari Wojtowicz responded to news of the closure,

Moving more work offshore should be alarming to consumers in the United States no matter who the employer is. Not only does it further erode middle-class American jobs, but as more and more businesses are using offshore call centers, not just in the Philippines, it is putting customers at a greater risk for identity theft. Your personal information (ss#, credit card#, bank account#) are more likely to be stolen or illegally sold when you provide it to companies (and workers) outside the US. That’s one of the reasons CWA has been pushing for the call center bill federally. Our laws (including consumer protection) don’t reach beyond our borders, so it’s one of the important reasons to pass a law that requires businesses to disclose the location of the worker you are talking to, and give you the option to be transferred to someone working  inside the United States, before you provide personal or financial information. 

The news comes as a surprise since in November 2018, Kevin Greer, the director of the then 350-employee Mendota Heights customer-contact center, said Alorica planned to expand the facility. Quoted in the Star Tribune: 

“We plan to add another 300 people by the end of the year,” Greer said. “We serve one of the largest retail pharmacy chains in the country and a growing global travel company [from Mendota Heights] and a few other clients.”

The news comes after Alorica announced in October 2019 its plans to hire 9,000 additional call center employees in the Philippines and a total of 25,000 workers globally. 

The news of the Minnesota closure and layoffs continues Alorica’s recent pattern of shuttering U.S. call centers.

Since August 2019, the company has announced plans to close call centers in Arizona, California, two locations in Florida, Indiana, Michigan, North Carolina, and Wisconsin, laying off more than 2,100 U.S. total workers in the process.

According to Brenda Roberts, CWA Vice President District 7,

The layoffs in Minnesota are the latest in the string of reminders that Alorica’s business model is all about creating a race-to-the-bottom for workers, by laying off U.S. workers and exploiting workers overseas in places like the Philippines. The Mendota Heights call center is the seventh U.S. call center closure that Alorica has announced since August 2019, all while ramping up their overseas presence in the Philippines and other countries. It’s time we end the corporate offshoring and outsourcing model that Alorica and its competitors rely on, as it hurts U.S. workers and communities as well as their overseas counterparts.

Alorica’s expansion in the Philippines will bring Alorica’s workforce to nearly 50,000 in that country, servicing the U.S. customer base for corporate clientele including AT&T and Citi.

In the Philippines, Alorica takes advantage of weak worker protections in order to intimidate employees and prevent them from joining together to advocate for improved working conditions.

A delegation from the Communications Workers of America (CWA) recently traveled to the Philippines to meet with Alorica workers firsthand and described learning of a climate of hostility that has allowed Alorica to fire dozens of union supporters and bring trumped up criminal charges against Filipino union officers, just for holding a protest outside an Alorica office.

In prior reporting, Wojtowicz explained that following a teleconference where she had the opportunity to speak to AT&T call-center workers in the Philippines. She learned of working conditions that are unthinkable by US labor standards, such as the reported practice of verifying that female employees have their monthly periods, because being pregnant would be a breach of their contract. These types of practices coupled with unbelievably low wages for overseas workers contributed to AT&T’s $30 billion in profits last year.

CWA argues that Alorica’s practices make the case for anti-offshoring legislation, such as the bipartisan federal “U.S. Call Center Worker and Consumer Protection Act” (S.1792 and H.R. 3219), and trade agreements with enforceable labor protections, while underscoring the importance of the ongoing solidarity efforts between call center workers and advocates across the world.

Alorica has announced the layoffs of more than 4,100 U.S. call center workers since September 2018 – including more than 2,150 since August 2019 

• In December 2019, Alorica announced plans to close a Tampa, Florida location and lay off 487 workers and plans to close a Green Bay, Wisconsin call center and to lay off 143 workers in the process. 

• In October 2019, Alorica announced plans to close a Jackson, Michigan call center and lay off 67 workers. 

• In August and September 2019, Alorica announced it was closing five other U.S. call centers, laying off a combined 1,500 workers in the process. This includes the announced layoffs of 192 workers in Mesa, Arizona; 799 workers in Fresno, California; 216 workers in Sunrise, Florida; 147 workers in Lafayette, Indiana; and 142 workers in Jacksonville, North Carolina.

• The August through December 2019 layoffs follow earlier Alorica closures and layoffs in 2018 and 2019. Alorica announced in April 2019 it would close a Spotsylvania County, VA call center, laying off 311 workers. In December 2018, Alorica announced the layoffs of 367 call center workers in Beaumont, TX. In October 2018, Alorica announced it would close its Terre Haute, IN call center by the end of 2018, laying off approximately 300 workers. In September 2018, Alorica announced the layoffs of 635 call center workers in Kennesaw, Georgia.

• In addition to the layoffs during the past year, a series of Alorica layoffs in 2017 in Colorado, Iowa, Kansas, and Wisconsin eliminated the jobs of nearly 1,000 call center workers.

Alorica has been growing its presence overseas, especially in the Philippines 

• Alorica announced in October 2019 it was hiring 9,000 additional BPO workers in the Philippines, part of a global hiring expansion of 25,000 new workers at Alorica’s locations around the world.

• The new 9,000 Filipino workers will bring Alorica’s workforce in the Philippines to nearly 50,000. Alorica previously employed approximately 40,000 workers after hiring 10,000 Filipino call center workers announced in March 2017 (Business News Asia 3/14/2017). The Alorica website highlights 17 different call center facility locations in the Philippines alone. 

• Alorica’s corporate clients in the Philippines include “Comcast, AT&T, Barclays, and Citi, among others,” according to a 2019 American Prospect article. 

• In January 2019, Alorica leaders in the Philippines projected “significant growth” moving forward in the country

Allegations of mistreatment of workers in the Philippines

• Alorica workers in the Philippines have been speaking out against their treatment at the hands of Alorica. As BPO-focused outlet NearShore Americas described in September 2018, “A labor union in the Philippines has called for a strike, accusing global call center and BPO services provider Alorica of harassing and dismissing employees.”

• A January 2019 article in the American Prospect highlighted how call center operators in the Philippines, most notably Alorica, and the government are cracking down on efforts by Filipino call center workers to organize and improve basic working standards and conditions by refusing to recognize the legally established union of Alorica employees, illegally firing union supporters and leadership and filing frivolous legal charges against union members and supporters. A follow-up article in the Prospect in May 2019 highlighted solidarity efforts between CWA and labor organizers and call center workers in the Philippines. 

• In addition to the recent CWA delegation that traveled to the Philippines, AFL-CIO President Richard Trumka and CWA President Chris Shelton earlier this year sent letters to President Trump and Alorica CEO Andy Lee highlighting concerns over the treatment of workers by Alorica and the larger anti-union climate in the Philippines under the government of President Duterte. 

• The Duterte administration has engaged in ongoing retaliation against union organizers, most recently in the unlawful November 2019 raids and mass-arrests of nearly 60 progressives and trade unionists by military police, including longtime CWA ally Anne Krueger.

Operations in nine Latin American countries

• Alorica’s has a presence in nine countries in Latin America – Antigua, Brazil, Dominican Republic, Guatemala, Honduras, Jamaica, Mexico, Panama and Uruguay – totaling 20 different locations and a total of 12,000 call center seats (Alorica website, accessed 2/7/18) 

• In November 2018, the call center industry publication NearShore Americas published a story titled, “Alorica Bets Big on Guatemala, to Add 2000 New Staff.” The story noted: “Alorica is embarking on an ambitious expansion program in Guatemala, with the BPO and call center services provider announcing plans to add more than 2000 people to its payroll in the Central American country. As part of the expansion, the BPO provider has unveiled a new contact center in Guatemala City … The Irvine, California-based company is looking to hire bilingual candidates who can speak in both English and Spanish.”

Filiberto Nolasco Gomez is a former union organizer and former editor of Minneapolis based Workday Minnesota, the first online labor news publication in the state. Filiberto focused on longform and investigative journalism. He has covered topics including prison labor, labor trafficking, and union fights in the Twin Cities.