Closure of Alorica call center in Mendota Heights seen as trend

Alorica, the California-based call-center operator, is generating cranky-call headlines around the country.

A little more than a year ago, Alorica said it was doubling employment at its Mendota Heights facility to about 600 and raising its minimum wage to $14 an hour plus benefits because of the press of business.

Earlier this month, the Irvine, Calif.-based company quietly informed the state that it would lay off the remaining 158 employees and shutter the building by March 15. It's among several moves by the company to cut jobs nationwide, including at call centers in Wisconsin, Florida, and North Carolina.

"As we continue to stay on top of market trends and evolve with our clients' business needs, we sadly must make changes that sometimes impact our people," said Erica McCarthy, a company spokeswoman, in an e-mail. "We thank each of our departing colleagues for their contributions and we are committed to treating them with respect, as we do all our employees, during this transition.

"As a global company, we continue to hire, grow and make changes to existing operations in all of the regions we operate in. While we are exiting this specific location, I just want to make clear that in 2019 alone we hired tens of thousands of people in North America … nearly 50% of our employee population is based in the U.S."

The tone of a company notice to workers when the closure decision was announced was brisk.

"During the notice period between now and the termination date, you will remain subject to and expected to abide by company policy, procedures and job expectations," Alorica vice president Dan Finnegan said in a memo to Mendota Heights employees. "Failure to do so can result in involuntary termination before the termination date. "Although change can be challenging, we hope you will remain with Alorica during your notice period, and we ask everyone to remain respectful of one another and committed to meeting job expectations."

Alorica isn't elaborating on reasons for the closure. Employees said the speculation included loss of a big customer and what seems to be a transition to lower-cost call centers in the Philippines and elsewhere.

Alorica, a privately held company, said it had more than 100,000 employees in 2018. In listing Alorica among its 5,000 fastest-growing private companies, Inc. magazine estimated its 2018 revenue at $2.2 billion.

The Communications Workers of America is critical of the company for cutting its U.S. "engagement-center" workforce as it grows in lower-cost Asia.

"The layoffs in Minnesota are the latest in the string of reminders that Alorica's business model is all about creating a race to the bottom for workers, by laying off U.S. workers and exploiting workers overseas in places like the Philippines," according to Brenda Roberts, a Communications Workers of America vice president. "The Mendota Heights call center is the seventh U.S. call-center closure that Alorica has announced since August 2019, all while ramping up their overseas presence in the Philippines and other countries. It's time we end the corporate offshoring and outsourcing model that Alorica and its competitors rely on, as it hurts U.S. workers and communities as well as their overseas counterparts."

The CWA claimed Alorica's workforce is nearly 50,000 in the Philippines, serving huge U.S. customers such as AT&T and Citi Corp.

A CWA delegation recently traveled to the Philippines to meet with Alorica workers and described a climate of hostility that has allowed Alorica to fire dozens of union supporters and bring "trumped up criminal charges against Filipino union officers, just for holding a protest outside an Alorica office."

Alorica declined to respond.

The CWA calls for anti-offshoring legislation, such as the U.S. Call Center Worker and Consumer Protection Act and trade agreements "with enforceable labor protections." It also underscores the importance of solidarity efforts between call center workers human rights advocates.