Startek Reports Q4 and Yearly Numbers -Improves Numbers by Shutting Down Canadian (Sudbury) Facility and Moving Services Offshore – February 23, 2011 – Cornwall Ontario

Cornwall ON – Call Centre Giant Startek reported their Q4 and year end numbers for 2011.  The company cited it’s improved profits by moving more services off shore.

Here in Cornwall Ontario the Giant employs hundreds of people.  With the need to service Bell’s French services the local and nearby Bilingual population fills the corporations needs.

Some worry what would happen locally if that contract were lost.

LINK

The Company continued to execute on its three point strategy: expanding offshore, rationalizing U.S. operations, and reducing its Canadian exposure. Fourth quarter revenue from offshore facilities grew 22% vs. the third quarter of 2010 and 155% vs. the fourth quarter of 2009. The offshore operations also returned to profitability with a gross margin of 6% in the fourth quarter of 2010. During the quarter, the Company consolidated two U.S. sites in Greeley and Grand Junction, Colorado, and announced the ramp-down of its Alexandria, Louisiana facility, which will result in future utilization and margin improvements. Also in the quarter, the Company completed the closure of its Sarnia, Ontario site announced earlier in 2010 leaving only three sites in its Canadian operation. All three of these initiatives are intended to increase offshore delivery capacity and restore profitability through utilization and margin improvements.

Sounds like the more the company uses low dollar labor offshore the higher their profits.   That certainly doesn’t bode well for their North American staff.

What do you think about companies that move offshore?  You can post your comments below.

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11 Responses to "Startek Reports Q4 and Yearly Numbers -Improves Numbers by Shutting Down Canadian (Sudbury) Facility and Moving Services Offshore – February 23, 2011 – Cornwall Ontario"

  1. Garfield   February 23, 2011 at 9:54 AM

    Sad when companies are forced overseas to maintain profit margins, however it is the reality of modern day economics. Without profit, there is no company and no employees. If a company such as Startek does not look after its bottom line with options such as offshore, then obvious a competitor shall. In North America we have high overhead, high wages, high taxes, high standards. We shall not sacrifice any of this and so we must adapt to global realities. We are with choices and corporations are with choices… each wants to survive and to succeed best as we can. The days of protectionism and isolation are long gone, it is now a global economy and global workforce. In business profits are a necessity, sounds cold, but it is reality. Those that change and adapt with changing times are better equipped to survive, those that do not are less prepared for survival. There are various options for change and increased profit margins with offshore being only one such option. I believe it is seldom the first choice and suspect it becomes a reality as other other options are exhausted.

  2. Grimalot   February 23, 2011 at 12:09 PM

    Its like using children to make Nike shoes as far as I’m concerned.. we should throw these backstabbing companies out, that get their starts here and then go to cheap labor elsewhere and foreign companies instead of supporting the people that helped them get started in the first place…

  3. antagonizer   February 23, 2011 at 12:13 PM

    The problems with Startek have little to do with economic downturns and more to do with mismanagement on the part of it’s higher ups. The facility in Cornwall saw the firing of it’s branch manager, which hints at the ineptitude of it’s leaders and the attempts being made to rectify it. However issues of micromanagement and employee misuse continues to run rampant throughout the facility as can be seen by numerous sites on the internet, including facebook, and various blogs that supply a profoundly huge amount of negative feedback from past and current staff.

    Losing a company, such as Startek, would be loss for Cornwall, in that many good people would end up in the unemployment line, however the damage they are causing to employer/employee relations by destroying moral, and worker faith is far worse. As they (Startek) churn out staff in their assembly line fashion, these employees are carrying their negative experiences to other sectors, of employment, in Cornwall, thereby infecting the local job market as a whole with negative attitudes.

    The bottom line is Startek is damaging the job market in Cornwall with it’s poor management style and honestly, I feel we’d be better off, in the long run, without them.

  4. smee   February 23, 2011 at 12:18 PM

    Grimalot
    I was wondering how much responsibility you take for this business venture carried out by star tek. Are you willing to have your family and friends surrender their cell phones to show how much you care…or will you just blame someone for trying to make sound business decisions.

  5. admin   February 23, 2011 at 12:48 PM

    Gee Antogonizer, I’m actually agreeing with you on this one. Startek has a large role with a certain segment of the working market. I can tell you my own experiences with company leave much to be desired. I have no idea what their management culture and training is like, but based on my personal experience if they treat their staff with the same disrespect they probably have some issues.

    That being said, like factory jobs of a hundred years ago, if you lose a block of jobs in one shot it hurts a community. In my mind it never hurts a company to get along with people instead of being nasty…

  6. Grimalot   February 23, 2011 at 1:00 PM

    Smee lives.. 😉

    I take 100 percent responsibility for my actions Smee. In fact, I do not carry a cell phone or PDA or anything that requires me to give money to Bell, Rogers, or any of the mega monopoly phone companies that outsource their work.

    Once upon a time, you used to actually work for the company instead of in an outsourced call center. That company used to pay you more than the outsourced call center as well. But while I was working for certain businesses, directly or in outsourced call centers, and when I started seeing more and more of a trend in sending the work overseas to India, Phillipines, etc, and seeing the level of service that people have been getting, plus seeing that these major phone conglomerates only believe that a customer is worth between 3 and 5 minutes to them, I have 0 sympathy for them. I have sympathy for the rep, who will be out of a job most likely, all because of the bottom line of the phone/internet company that is outsourcing in the first place.

    You have to look at the information as presented, Startek is an outsourced company, their bottom line is set by Bell/Rogers/whoever. But for all these companies to shamelessly send work overseas to meet the demands of the monopoly companies that are sitting there recording record profits, and yet still demanding less expensive and ludicrous terms from these outsourced companies, I do have a problem with that Smee. Startek/Convergys/Teletech/many more just to set examples, were built up on the sweat of Americans/Canadians/etc, and I find it a shame that they turn their backs on these places and ship off overseas just to make a few bucks more worth of profit. Honestly, I think that no work should be outsourced to different countries, rather I think if a company is operating here, it should be supported here, plain and simple, and there should be a law for that to keep it like that. But thats just my ideals.

    To get back to your question Smee, I do not own any electronic device that I have to pay towards these monopolies. Any services I get, are definitely not from Bell/Rogers just because of reasons like that.

    Oh, and an extra tip for people that want to speak to a more local rep, if you have the opportunity to choose French queue, do that, and then ask to speak English to the rep. Since most of them have to be bilingual (thanks to those that do not support multiculturalism in Quebec but cry for it and bilingualism in the rest of Canada) these days to even get a minimum wage job (which are slowly being shipped out to foreign countries), they will usually assist you in the language of your choice. And at least you won’t end up getting the runaround from someone you don’t understand on the phone.

  7. Grimalot   February 23, 2011 at 1:14 PM

    I also agree with Antagonizer on their views.

  8. antagonizer   February 23, 2011 at 2:13 PM

    That brings up a caveat. Folks that work for Startek should refrain from posting comments that speak negatively (truthfully) about them. They tend to creep facebook pages and blog posts of reps. and fire accordingly. It’s not hearsay, and in fact a policy made public to all staff.

    On another note, I can name half a dozen local employers who will not hire a person based on their past experience with Startek employees. It’s a sad state, but their reputation as a negative influence is indeed harming job prospects as a whole.

  9. smee   February 23, 2011 at 5:42 PM

    Grimalot, do you have a landline or perhaps an internet providor? Seems you do use in some way services from people you claim not to support.

    Star Tek is just a small portion of the bigger picture

    The management in Star Tek are promoted from with in. I guess it is another nail in our ability coffin.

  10. Grimalot   February 23, 2011 at 7:54 PM

    No one said management isn’t promoted from within. Its the big companies, posting record profits, that are squeezing blood from stones from within the country, as they are forcing these outsourced companies to find work from outside of the country in order to meet their demands. I go back to my original statement, that if a company operates within Canada or the US, then they should keep the jobs here and support from within the country. If not, and they keep on posting record profits while trying to gouge their customers, both on money and time, then they should not operate here, and leave place for companies that want to treat their customers proper and with respect!

  11. Grimalot   February 23, 2011 at 7:55 PM

    And actually any landline or internet provider I do use, are independents. They would have been gouged over this whole UBB thing. I’m so glad that didn’t go through! Yet.. but we’ll see how much our government cares about Canadians after 60 days..

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