BUSINESS

Alorica to close: Topeka to lose 300 jobs

Morgan Chilson
The Alorica call center at 115 S.W. 29th St. in Topeka will close May 26. (Thad Allton/The Capital-Journal)

Alorica will close its Topeka call center on May 26, eliminating 300 jobs there.

A company official confirmed Thursday afternoon it had made the decision to close the center at 115 S.W. 29th.

“While it was a difficult decision, we’ve decided to transfer these positions in Topeka to our other U.S.-based offices where employees serve the same client,” said Ken Muche, director of global public relations. “By bringing more people together who work for the same client, team members will benefit from greater engagement with each other during training and share best practices more frequently.”

An Alorica employee on location said Thursday the company was letting employees know as they came in for their shifts throughout the day. She expected all employees to be aware of the center’s closure by the end of the day.

The number of positions at Alorica has fluctuated sharply since it opened in 2007. In June 2016, Irena Boostani, a media strategist for Alorica, said there were 395 employees at that time. In February 2015, there were 180 positions, she said. The company at that time had said it planned to have 600 team members on board by the end of August 2016.

“The total number of employees at any contact center can ebb and flow over the course of a year (or year to year) for various reasons,” Boostani said in June 2016.

Reasons included hiring for seasonal work — particularly in the fourth quarter — and the addition or loss of a client for which Alorica provides call center support, she said.

When Alorica opened in Topeka, the Joint Economic Development Organization approved a performance-based incentive that could amount to $88,850 annually over 10 years. The company was required to have at least 500 employees to receive those funds.

It received $153,200 in incentives, paid in three payments in 2008, 2010 and 2011, said Jackie Steele, GO Topeka vice president. During those years, the company was required to have 500 jobs — full-time with benefits and paying at least $9 an hour — during the preceding year to qualify for the incentive, she said.

Steele said GO Topeka had spoken with company officials earlier this year.

“There was some positivity that they may actually be expanding in Topeka, but they were waiting on information from corporate,” she said.

GO Topeka is working closely with the company on how to best help employees transition to new positions or pursue educational opportunities, Steele said. Topeka has about a 4 percent unemployment rate, which she said is considered basically full employment. That situation hopefully will help Alorica’s employees in the job market.

Throughout the years, Alorica repeatedly made statements about adding jobs. Last year, Muche said Alorica was seeking to hire for as many as 200 new positions in Topeka, and the company had the intention of reaching 600 employees by August 2016.

In June 2015, JEDO voted to decrease the number of employees Alorica would need to earn the incentive dollars from 500 to 300. At that time, Keith Lee, an Alorica site director, said the company planned to hire 100 workers to get above the 300-employee level.

The incentive contract with JEDO expires this year.

David Sollars, dean of the Washburn University School of Business, said he hesitates to put a dollar amount on the economic impact of lost jobs to Topeka. Too many factors can dramatically change that impact, he said.

“You can obviously do lots of calculations, but you’ve got to be careful because you’ve got to look at the type of jobs they are,” he said. “In the short run, obviously, there’s an economic impact. What you’re worried about is the purchasing power of the people who are laid off.”

Severance paid and unemployment insurance may alleviate some of those immediate concerns, he said. Company officials haven’t indicated whether employees will receive severance pay.

A key question is whether there are other jobs available in the community for people with those skills. At a call center, customer service skills are important, and Sollars pointed to other Topeka businesses that hire for those skills, including Blue Cross Blue Shield of Kansas and Security Benefit.

“In the short run, obviously, no one wants to lose jobs,” Sollars said. “Those of us who study the economy hate to see jobs being lost.”

But the critical aspect of determining the effect on the community will be how long Alorica employees go without finding other jobs, he said.

Mayor Larry Wolgast said such layoffs are difficult for any community, but he doesn’t lose sight of the fact that the situation is about the employees involved.

“It’s always tragic that people are laid off, that they lose their jobs,” he said. “I know the Chamber, GO Topeka, has already mobilized to work with workforce and the various elements in the community that are helpful in a time like this. When this many people lose their jobs, it’s a blow to the community.”

Contact reporter Morgan Chilson at (785) 295-5659 or @crazeywriter on Twitter.