Tough times for telemarketing

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Job losses continue to mount in the embattled telemarketing industry due to offshore outsourcing and the popular do not call registry.

Three thousand call centers in the U.S. are expected to close by 2008, according to a report released last month by Datamonitor. The report said the decline would be gradual rather than precipitous.

The research company said there are currently 50,600 U.S. call centers, with 2.86 million "agent positions," defined as a desk where agents work in shifts. It forecast agent positions would shrink by 133,000 to 2.72 million in 47,500 call centers by 2008.

"It's very small," said Mark Best, an analyst and author of the report, of the shrinkage. "It should be kept in mind it will be 133,000 agent positions over five years, so it will be a gradual decline."

Others characterize the expected loss as much more grim.

"It's a huge and significant economic impact and a significant change in the way business is done," said Tim Searcy, CEO of the American Teleservices Association. "If anything, they [Datamonitor's estimates] sound low."

Searcy said the numbers sounded accurate based on the methodology used but noted Datamonitor looked at call centers whose sole business is telemarketing. "Folks who use the channel extensively make up 4 million agent positions," he said, referring to major marketers that handle telemarketing operations in-house.

Exceptions expected

Two expected exceptions to the downward trend are b-to-b and outbound sales. "There will be a growth in the amount of b-to-b activity done by phone rather than in person, Searcy said. "We've seen more contracts being given out by companies that want sales done by teleservices rather than feet-on-the-street salespeople."

While it's expected that inbound teleservices will continue to be sent offshore, outbound sales sent offshore may come back. "There will be a migration back to the U.S. in outbound sales work," Searcy said.

While the offshore handling of straightforward business processing and service calls will continue to grow, many marketers want to be able to closely supervise the more complex process of outbound sales, Searcy explained.

Layoffs abound

Meanwhile, teleservices layoffs in the U.S. abound. Citigroup laid off 400 employees when it shuttered its Tempe, Ariz., call center in April. That was the month it acquired full ownership of e-Serve International, an India-based call center in which it had previously had a 44% stake. In mid-August, 450 layoffs were announced at Citigroup's West Des Moines, Iowa, call center.

In June, MCI announced it would close four call centers in the U.S. AT&T Corp. laid off call center staff in July when it announced it was exiting the consumer market. Telemarketing companies Sykes Enterprises and Access Direct have also shuttered call centers in recent months.

Some telemarketers have shifted from outbound to inbound operations as a result of the do not call registry, which now has more than 62 million registered numbers.

"We've had significant growth in our inbound solutions department at a steady clip across both b-to-b and consumer work," said Lori Fentem, president of Synergy Solutions. About half of Synergy's business is now inbound, up from 15% to 20% in January.

"It fits into my diversification model to shelter us somewhat from legislative activity," Fentem said.

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