The Sykes Enterprises call center in Milton-Freewater (pop. 6,600) is easily the city’s largest private employer, drawing about 520 workers from Umatilla County and Walla Walla across the border. So there was major concern in November when the company announced it expected to lay off 336 employees on Jan. 15.
“They’re certainly one of our largest employers,” says city manager Linda Hall. “They’re also in our top three for taxpayers. They’re a very integral part of our local economy. Any layoff at all is devastating; one this large would be very devastating.”
She compared a potential mass layoff at Sykes to the closing of the Fleetwood Travel Trailers in Pendleton, which took 415 jobs out of Eastern Oregon and had a depressing effect on local suppliers down to the drug stores, gas stations and other businesses that people tend to patronize in the town where they work.
But the concern following the Nov. 12 announcement fell short of panic because some local officials don’t believe Sykes will go through with the job cuts.
The spate of news reports included one alarming article from Tampa, Fla., where Sykes is headquartered: “For third time in 10 years, Sykes Enterprises layoffs threaten small Oregon farm town.” The headline refers to a false alarm in 2003, when Sykes twice threatened layoffs and announced its intent to close the call center. That never happened; Sykes drummed up new business and the call center stayed open.
Sykes depends on contracts that are often large enough to account for hundreds of workers. When those contracts come up for renewal, so do the jobs. Federal law requires companies to announce big layoffs at least 60 days in advance, which could be before the key contracts are renewed or renegotiated.
This seems like a volatile business to have as your most important employer — after all, Sykes closed its Klamath Falls call center, which employed about 450 at its peak, shortly after a similar layoff announcement. But Hall says Sykes is no more volatile than any typical big business, citing agriculture and wildly fluctuating prices for local alfalfa farmers.
The Community Action Program of East Central Oregon, the local Workforce Investment Act partner, has set a date for pre-layoff orientation, the first step in the state-funded dislocated worker program. But CAPECO director Deborah Hayward emphasizes that it’s in pencil. “We’re remaining very optimistic that Sykes will secure another account that will obliterate this layoff and we won’t have any layoffs,” she says.
Hall is also optimistic and told the Walla Walla Union-Bulletin she’s keeping “everything crossed.” But Sykes corporate spokeswoman Andrea Burnett doesn’t share the local optimism. She says employees have been given layoff notices and spoke only extremely vaguely about the odds of avoiding layoffs. “We continue to see demand for outsourcing solutions,” she says, adding that Sykes will help employees get access to transitional services in the event of a mass layoff.
When Sykes announced it was cutting back to about 80 employees at its Klamath Falls Center, local officials responded as if it were a warning bell. Trey Senn, executive director of the Klamath County Economic Development Association, and other partners from the county and the private sector probed Sykes about the future of the call center; the company admitted it was moving jobs overseas and would likely close. “Team Klamath,” as Senn calls it, spent the next two months rigorously recruiting a new company to take over the Sykes building and successfully replaced Sykes with another customer service company that picked up many of the Sykes employees and currently employs 550.
Team Klamath appears to be in stark contrast to Milton-Freewater, which may have forgotten to supplement “hope for the best,” with “prepare for the worst.”
UPDATE, Jan. 20: Sykes laid off 225 employees on Jan. 15. The company says about half of those employees live in Milton-Freewater. The rest live in Walla Walla, Wash.