Call centre abruptly closes in Cape Breton, leaving hundreds without work

FILE - ServiCom officials gathered workers at the operation in Sydney just after lunch to inform them that it was shuttering the facility, following weeks of pay delays and a bankruptcy protection filing by its parent company in the United States.
FILE - ServiCom officials gathered workers at the operation in Sydney just after lunch to inform them that it was shuttering the facility, following weeks of pay delays and a bankruptcy protection filing by its parent company in the United States. Getty Images

Politicians offered a glimmer of hope Friday to hundreds of Cape Breton call centre workers grappling with layoffs less than three weeks before Christmas, saying the operation has a “bright future” and could be up and running again soon.

ServiCom Canada announced the closure of its Sydney operation Thursday, handing pink slips to almost 700 workers in a region already struggling with a stubbornly high unemployment rate.

The shutdown followed a bankruptcy protection filing by ServiCom’s U.S. parent, weeks of pay delays and promises of bonuses and pay incentives for workers who stayed.

In the aftermath of the layoffs, many workers spent Friday filing employment insurance claims and seeking help from local charities.

“I am devastated, to say the very least. It was definitely not what I expected,” 26-year-old Kayla Williams, who worked at the office for five years, said from her home in Sydney.

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“I want to be able to put (heating) oil in my tank. I want to be able to put groceries in my cupboard. I have two children here.”

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Nova Scotia Business Minister Geoff MacLellan said it was a “devastating time for Cape Bretoners.”

However, the Cape Breton politician also said he was confident the centre had a “bright future” after speaking with a prospective buyer Friday morning.

“There is a potential buyer that is very interested and will do whatever they can to make sure this centre is part of their complement in the very near future,” MacLellan said, adding that the potential buyer was looking forward to “opening it early in the new year.”

The minister said he couldn’t offer more details, citing court proceedings in the United States. He said a deal was pending when the bankruptcy issues caused a snafu.

“We’re working with that entity along with the federal government to make sure we do what we can to re-engage this call centre as soon as possible,” he said.

Cecil Clarke, mayor of the Cape Breton Regional Municipality, said the closure “came as a shock,” despite the company’s ongoing financial troubles.

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“It’s never good to lose your job, but during the winter and Christmas season, it’s devastating,” he said.

Still, Clarke said company representatives have indicated to him they intend “to have this situation resolved in the next couple of days.”

He said even though the call centre’s U.S. parent is in financial trouble, the centre itself was turning a profit.

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Meanwhile, Clarke said the immediate focus is on providing temporary transition assistance to workers.

The Sydney operation first opened under different ownership nearly two decades ago during a wave of call centre openings across the Maritimes.

Businesses were attracted by the region’s lower payroll costs and often received government incentives.

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A Nova Scotia Business Inc. media release from March 2009 said the Crown-owned business agency provided ServiCom, a subsidiary of JNET Communications LLC, with a payroll rebate worth up to $914,400 over five years.

Since 2010, ServiCom has received $638,360 in loans from the federal Atlantic Canada Opportunities Agency and Enterprise Cape Breton Corporation, part of ACOA since 2014.

An ACOA spokesperson declined to say how much money had been repaid, citing client confidentiality.

Unlike an outbound call centre, ServiCom provided customer support to major firms, such as OnStar Corp., a subsidiary of General Motors, Sirius XM Satellite Radio, AT&T Inc. and Allstate Insurance company, Clarke said.

“These are service-based and often client-initiated calls into the centre” rather than the “cold calls of the past,” he said.

If the call centre isn’t acquired by another firm, those who were laid off face grim job prospects in the Cape Breton.

The unemployment rate on the island was 15 per cent last month – more than double the provincial rate of 6.7 per cent, according to unadjusted figures from Statistics Canada.

Todd Riley, the former site manager at the Sydney office, suggested on his Facebook page that work could be coming to the site under another company.

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“Hardest day of my life … I cannot express how much I am hurt by this decision but I am working as hard as possible and believe we will get back to work soon,” he wrote.

Williams, who worked the phones for OnStar, said she had experienced pay delays dating back to August when she said there was a problem with the payroll system.

In October, she said employees had to wait about two weeks to get paid when the parent company was filing for bankruptcy protection. She said she is owed several weeks of pay.

She said employees were told they did not need to worry about losing their jobs.

“I feel like it was a trick to keep us all there, especially after promising us all of these bonuses,” she said.

“I have a two-and-a-half-year-old (daughter), a house, a mortgage and all the bills that come along with it, so this is not a great feeling – especially three weeks before Christmas.”

She said a local food bank was opening its doors to those who lost their jobs.

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