Last year was a frenzied one for customer-support companies like Sykes Enterprises of Tampa.
Eager to meet client demand for less expensive services, Sykes rushed to open and expand call centers in lower-wage countries including India, Costa Rica, the Philippines and El Salvador even as it closed others domestically, angering the rural U.S. communities it was departing.
At the same time, there were early signs of a backlash among U.S. consumers against strong accents and purportedly inferior service overseas. That led some companies that aren't Sykes clients, including Dell Computers and Lehman Brothers, to move their call center operations back stateside.
Despite such uncertainty, Sykes is expected to report a healthy profit this afternoon when it releases its 2003 financial results to the public.
Sykes is accelerating its offshore ramp-up. Though 27 percent of its global call center seat capacity was located offshore as of June 30, analyst Jeff Nevins of First Analysis Securities Corp. in Chicago said in a recent report that he expects the figure to reach 50 percent, or about 10,300 seats, by the middle of this year. Nevins also said he was pleased Sykes is opening its own offshore call centers rather than subcontracting with local vendors.
SBC Communications Inc., Sykes' biggest client at 19 percent of third-quarter revenues, must like it, too. According to Nevins, the companies' recent contract renewal called for "gradual migration" of SBC's call volume to Sykes' burgeoning offshore facilities.
Which may mean more U.S. call center closures ahead.