One of Cape Town’s larger outbound call centres has shut its doors, leaving its entire staff complement unemployed.
The closure has brought into focus the effects of the coronavirus and national lockdown on call-centre operations.
In a letter to staff, DigiOutbound said changes in customer behaviour and international regulations have altered the landscape it operates in.
The company — which mainly dealt with online gambling customers in the European and Australasian market — said the global sales environment has changed. Either customers no longer wish to be contacted by telephone or there are new laws that prohibit the sale of online gambling products over the telephone.
It also told staff that the ongoing national lockdown to curb the spread of Covid-19 had not been good for business.
“The length of time under Covid-19 lockdown has highlighted the challenges and the vulnerability of our operating model. The business model is no longer viable. The future under Covid-19 restrictions does not create a feasible environment in which to operate the business effectively,” the company told employees.
“DigiOutbound will consider closing the entire operation after a consultation process. The process will affect each and every single employee … Every job category will be affected,” read the letter.
One employee, who did not want to be named as they are still negotiating a retrenchment package, said the announcement was sudden: “We were all sent home during the lockdown. Our computers were given to a sister company so that their staff could work from home. And when we were expecting to come back from lockdown we were informed via emails and an online meeting that the company would be closing.”
Just over 200 staff members will be affected, according to the company’s lawyer Michael Bagraim.
He said the company had been paying staff salaries during the lockdown, but because of restrictions, and international factors, the business had collapsed.
“With the advent of Covid-19, international clients asked if we could still service them, but because of lockdown all the staff had to go home. The international clients then also became affected and cancelled campaigns. And that’s how the business came to an end,” Bagraim said.
According to DigiOutbound, attempts are being made to accommodate staff in sister companies as well as asking other call centres if they’re in a position to hire retrenched employees.
“These are really skilled workers, their experience is sought after,” said Bagraim.
The closure of an operation this size in Cape Town is a blow. The Western Cape accounts for more than 50% of South Africa’s business process outsourcing (BPO) companies. Currently, more than 60 000 people in the province are employed in the sector.
During levels five and four of the national lockdown, call-centre operations were allowed to remain open, but only if their business had a financial services component.
James Vos, Cape Town’s mayoral committee member for economic opportunities, said he was focused on keeping the call centres open by intense negotiation with the national department of trade and industry. This was done by commitments to decrease staff numbers and reconfigure offices to ensure physical distancing between workers.
“I am amazed at the commitment of these organisations to keep their employees safe,” Vos said.
“At one company they employ nearly 2 000 people across South Africa, of which 1500 reside in Cape Town. A prime example of how this organisation embraced the new normal is by the reskilling of staff. They retained the sales team to now function as a payment advisory team. The organisation took swift action to assist staff with pre-existing conditions, including offering pregnant women the opportunity to work from home first. Over and above adhering to strict social distancing practices on site, they fog the entire building every Saturday to ensure a safe and clean environment,” Vos added.
Vos admitted that because of the coronavirus lockdown, job losses in the sector would be expected, but he’s also expecting gains. He claims that the interventions made before and during the lockdown have resulted in 6 000 new jobs.
The BPO sector is one of the components of a regional economic recovery plan following the shrinking economy.
Vos said plans for a skills pipeline to supply the growing industry and demand for BPO operations in South Africa is already under way, with Cape Town the first municipality to receive funding from the National Skills Fund, which sits under the department of higher education and training.
It is hoped that a million young people will be trained and be ready to compete with a country such as Indonesia; currently the world leader in the BPO sector.
Gareth Pritchard, CEO of Business Process Enabling South Africa (BPESA) in the Western Cape, confirmed the coronavirus outbreak has affected call sales operations around the world and the job losses in South Africa were unavoidable.
He added that South Africa hosts several international airline call centres and the grounding of the international flight market has had ripple effects.
“If you’re a company doing outbound cold calls, you and others around the world have suffered. Sales calls have just plummeted. It’s a tough business at any time. There will be job losses, even in the non-sales sector environment. But once the crisis has gone completely, we’ll come out of this breaking even in the number of jobs lost and gained,” he said.
“The BPO has done well, despite [lockdown] regulations reducing space by two-thirds. So, if you had 100 people working at the beginning of the crisis, you were only allowed to bring in 33 people. Businesses have survived. We’re seeing more global deals being made at the moment,” Pritchard added.
He said the industry will intensify training and infrastructure investment so that the locally based sector can capitalise on a global future where there will be greater use of computer technology and phone-based help, especially as the number of people walking into businesses for goods and services will diminish.