EDMONTON - Computer retailer Dell is closing a call centre in Edmonton this spring less than four years after it opened, a move that will cost 900 employees their jobs.
The Texas-based company, which is the world's No. 2 personal computer maker, said Thursday the Edmonton closing is part of a global plan to increase its efficiency and performance.
"This has been a difficult decision. We have a good team of people and will do all we can to help them and our community partners through this transition,'' Dave Vanden Bosch, Dell's Edmonton site leader, said in a statement.
Edmonton landed the call centre after offering Dell a $6-million incentive package, including a dollar-per-year lease on city land and a five-year property tax break.
Employees were told of the closure Thursday morning. Some will lose their jobs immediately and others will be let go in the coming weeks and months.
The call centre is to close permanently sometime between May and the end of July, Dell spokesman Blair Patacairk said.
"These people have really contributed to Dell, and it is not a reflection on the people who work here or their talents. They are absolutely outstanding. It is a very difficult decision for us to make,'' he said.
Reports suggested Dell was paying staff at the call centre salaries that ranged from $28,000 to more than $45,000 per year.
Dell officials would not comment on what will happen to the building or its lease.
"In terms of what will happen to the building and the land, we are exploring a number of options,'' he said.
Edmonton Mayor Stephen Mandel said he is disappointed by the closure but appreciates that Dell is facing financial challenges and had difficulty retaining staff because of Alberta's hot economy. He said the high Canadian dollar was probably a factor as well.
Mandel said the city didn't give the company any cash up front, but isn't sure if it will recoup any forgone property taxes. The city retains ownership of the land the building is on.
"We knew it was coming, but we didn't think it would be to the degree it is. But it is sad when it happens,'' Mandel said.
"A positive economy has negatives too. Dell did come here on a hope that they would stay here long term. That didn't happen.''
The closure is one of the biggest job cuts in Alberta in recent years and a sign that things may be starting to slow down a bit in the energy-rich province.
An official at the Northern Alberta Institute of Technology in Edmonton, which trained about 600 Dell employees, said rumours of the closure have been circulating for months.
NAIT stopped offering training for Dell employees in September, said Terry Drabiuk, NAIT's director of corporate and international training.
"We haven't been doing any training for them since before Christmas, and we knew that they were ramping down,'' Drabiuk said, who added the closure will not affect the school or its staff.
"We knew this was coming. There were hints of it coming for a while.''
The closure comes on the heels of cuts at Dell's Ottawa call centre, which is cancelling plans for a 1,200-employee expansion and reducing its current workforce of 1,500 by an unspecified number.
The two Canadian call centres were built and expanded in recent years as part of a global push to improve Dell's customer relations following a series of problems with some of its products as well as slowing market growth, declining profit margins and intense competition.
Employees affected by the closure were being offered severance and career placement services, Patacairk said. Dell said it plans to move work that was done at the call centre to other facilities.
Last May, the company said it would slash as many as 8,800 workers over 12 months but said no cuts would be made in Ottawa. Since then, the rapid rise of the Canadian dollar has hurt its operations.
The company refused to say exactly how many of the approximately 1,500 Dell Canada employees in Ottawa, who provide technical support for Dell customers in Canada and the United States, will lose their jobs.
But a spokesman said the number is in line with the company's overall aim of cutting its workforce by 10 per cent, suggesting about 150 jobs were being lost.
Dell Canada, headquartered in Toronto, also has offices in Montreal.
The company, which has been pushing its computers into more retail stores after building its business originally as a direct-marketing company, also announced Wednesday it will close its 140 shopping mall kiosks in the United States.
Dell now sells computers and other devices in more than 10,000 stores around the world, including Wal-Mart Stores Inc. and Best Buy Co. It opened the kiosks in 2002 to boost sales of notebook computers.
Dell's U.S. consumer revenue declined 26 per cent for the six months ended Aug. 3, compared with the same period in 2006.
