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Sykes leaves Marianna a parting gift

Chastised for closing a dozen U.S. call centers over the past three years while opening ones overseas, Sykes Enterprises took mercy last month on one of its former host communities.

At a ceremony in Marianna, the Tampa call center operator returned 26 acres of land it received from local officials as part of a multimillion-dollar corporate recruitment package in 2000. It also donated some expensive equipment and a check for $125,000.

The good deed went unmentioned in a Sykes news release about the Marianna facility three days later. "We didn't do it to seek publicity," senior investor relations director Subhaash Kumar explained. "People might say, "Oh, that was really self-serving.' "

But there might have been another reason to stay mum: If word got out, some of Sykes' other former hosts might seek a handout, too. That could end up costing the company a lot of money, or, if it refused, another round of bad press.

Even acts of kindness can backfire in the unforgiving world of public companies, where the interests of shareholders, customers, executives and rank-and-file workers often clash.

"They did nothing like that here," said Matt Sjoberg, whose economic development organization helped raise millions of dollars to bring Sykes to rural Eveleth, Minn., in 2000, only to watch the company vanish in late 2002. "It was, "We're out of here. We want to return as much of our shareholders' wealth as we can.' "

Sykes' gift to Marianna and surrounding Jackson County capped a dramatic series of events.

In early August, the company laid off 145 call center staffers and delivered even worse news: It would close its Marianna call center on Oct. 2.

Less than two weeks later, the first of four hurricanes struck Florida, and the Federal Emergency Management Agency hired Sykes to handle disaster relief phone calls. The company assigned the account to its Marianna center.

Sykes' Marianna staffers were taking those calls on the evening of Sept. 15 when Hurricane Ivan stormed ashore. Company executives evacuated the call center; two hours later a tornado spawned by the hurricane all but destroyed it.

But Sykes helped write a happy ending. At a Dec. 10 ceremony with city and county officials, company executive David Reule didn't just cut a check and hand over a deed. He gave away a $200,000 back-up generator, the $500,000 building that housed it, a costly phone-switching system and the right to salvage nearly anything from the call center's remains.

The package might be worth as much as $3-million to a future tenant, said Bill Stanton, executive director of the Jackson County Development Council. He and other local officials are considering rebuilding the facility, possibly with prison labor, in hopes of attracting a new employer.

Ordinarily, a community must offer millions of dollars in incentives to attract Sykes. But when Sykes leaves, it does not offer its host a parting gift. Instead, it sells, leases or mothballs the property and keeps the proceeds.

Despite its departure from Marianna, Stanton praised the company. He said Sykes employed an average of 300 workers during its tenure and trained about 1,000. He said there was no way the company could have foreseen in 2000 that its clients would begin demanding pricing that could only be met by call centers overseas, where college graduates will answer phones for as little as $1 an hour.

"They are terribly embarrassed by what has happened to their company and their reputation as a result of the terrible economic blow that was delivered to them first, and then the communities where they worked," Stanton said. "They had no choice . . . They were fighting for their corporate lives."

Kumar, the senior investor relations director, said Sykes made an exception for Marianna because its call center was destroyed by the hurricane. In all other cities, he said, the company left behind a state-of-the-art call center that could, under a new employer, resume hiring. The call center in Manhattan, Kan., for example, was closed only a week before it reopened in June under the ownership of Alorica Inc. of Chino, Calif.

Stanton thought Sykes was simply rewarding Marianna for being a good sport.

Unlike some of the other former Sykes hosts, Marianna officials never tried to embarrass Sykes in the press. Community leaders understood it probably didn't make financial sense for Sykes to rebuild the call center. After the tornado hit, Stanton even invited company officials to temporarily share his county offices for free, and they accepted.

When real estate director Reule told Stanton that Sykes had not decided whether to rebuild the facility, Stanton kept his mouth shut, even though he knew rebuilding would make little financial sense for the company and thus was highly unlikely.

"If (Sykes) could undo and go back and make everybody whole, they'd do it," he said graciously. "But they can't do it."

No matter why Sykes singled out Marianna, it bears noting that the cost of its magnanimity was relatively small. A speculator would have paid no more than $1-million for the land and the call center's remains, Stanton said. And Sykes had received a $7-million insurance settlement.

Now, Sykes just hopes the Marianna story doesn't spread too far.

"Obviously (Sykes has) no legal obligation" to give anything back, said Sjoberg of Iron Range Resources in Minnesota. "(But) I certainly will mention this to people around here. Maybe someone'll say, "Hey, let's see if we can track David Reule down, see what he has to say anyhow.' "

Scott Barancik can be reached at baranciksptimes.com or (727) 893-8751.

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