[ST. JOHN'S, NL] — Fusion BPO Services Limited is putting operations at its Marystown call centre on hold in a move the company’s president described as “a temporary measure.”
Nalin Tikkoo indicated a change in the business climate in the past couple of years, including near parity between the Canadian and U.S. dollars, as well as high wages and taxes in Newfoundland and Labrador, have proved challenging.
“It’s a suspension. I wouldn’t say closure.”
Noting the vast amount of the company’s business comes from south of the border, he acknowledged there is no new business on the horizon from the U.S. and the company is under pressure from existing customers on costs.
“When we started this business a few years back in Newfoundland, our cost economics was in Canada’s favour.”
Tikkoo, who said the Marystown decision had been delayed for some time, also explained the company has benefitted from help on behalf of the provincial government and was hoping that would continue.
“We find that support has kind of not been forthcoming as was in the past, because maybe of certain policies.”
Fusion BPO, which expanded to Marystown in 2007, operates a total of nine call centers with others in Stephenville, Grand Falls-Windsor and Carbonear in this province.
Tikkoo indicated neither of the other sites would be negatively impacted.
He acknowledged the Marystown centre is the smallest and as such the most costly to run.
Acknowledging the number of employees has fluctuated and was as high as 45 just last year, he said there are presently less than 20 people employed at the site.
Tikkoo said the company has been discussing possible options with the province for two years, through the Department of Innovation, Business and Rural Development, and is optimistic something can be worked out.
“We’re quite hopeful with the discussions with the NL government, with new project proposals on the table. We would like to get Marystown back as quickly as possible, because these are places we invested quite a bit in training, in getting skills up.
“We are planning to launch high technology projects, and launching our own training programs, so that people in Newfoundland province, including Marystown, can be trained to higher skills, so that we can (offer) competitive wages. The lower the quality of jobs, the more difficult it is to compete.”
DIRECT SUPPORT ENDED
In an email response, Innovation, Business and Rural Development Minister Keith Hutchings said “It is never good to see job losses and businesses experience challenges like those currently being experienced by Fusion BPO.”
The minister indicated the provincial government’s direct support of Fusion BPO’s Marystown operation, totalling $507,768, ended in June after five years.
He explained the investment was meant to assist the call centre establish its operations in the community, and become independent of government support.
“Our objective, as a government, has long-been focused on working with businesses, as well as our community and industry partners to assist in business development in all areas of Newfoundland and Labrador.
“The provincial government's financial arrangement with Fusion BPO and its operations in Grand Falls-Windsor, Carbonear, Marystown and Stephenville reflect that commitment.”
Meanwhile, the minister said the province remains open to helping Fusion BPO, and the business community as a whole, identify opportunities where government can assist in pursuing their goals and creating new opportunities.
“That said, we have to make sound investments that best utilize the provincial treasury and recognize that our businesses are operating in an extremely competitive global environment.”