You're Fired 

This month, Stream International \ndismissed 245 workers from its call center in Kalispell. \nPublicly, the company claims economic hardship. \nThat’s just part of the story.

Meet Bendy. He’s a flexible Gumby-like doll who got his name from employees at Stream International in Kalispell. Stream specializes in providing call center services for a variety of brand-name computer makers, Internet providers and other high-tech firms.

To work at Stream, staffers need to be flexible as job duties can change over-night. That’s why the company handed out Bendy dolls to its employees, who were supposed to be inspired by Bendy’s smile and ability to flex in all directions.

Carol Codrey likes her Bendy doll, and at first, she really liked her job at Stream. When she started at the company in March of 2001, Codrey arrived at her cubicle with the same optimism that trumpeted Stream’s arrival in Kalispell. The company was touted by city leaders as an economic savior—a source of not just jobs, but good-paying careers complete with benefits.

With her headset on and her attitude appropriately upbeat, Codrey toed the company line. Last April, she was named employee of the month while working on a contract for Microsoft’s MSN Internet service. The hours were sometimes long, and there was constant pressure from managers to handle customer service calls faster and more efficiently.

Codrey coped with the stress by munching Cheetos between calls and pulling weeds in her yard after work. She took Bendy’s lesson to heart and bent to absorb a 25-cents-an-hour pay cut, a reduction in company bonuses and changes in Stream’s benefit package that made it far less generous.

Then there was the verbal abuse from angry customers calling in to complain.

“We got cussed out quite a bit. They call you names,” says Codrey, conceding that “If you’re in customer service, you’re going to have this happen. It had nothing to do with me quitting the job.”

On Sept. 12, 2002, Codrey outlined her reasons for leaving Stream in what she described as an employer termination letter.

“I came to Stream with ambition and energy to do well. I had high hopes for this job and just 18 months later they are all dashed,” wrote Codrey, making it clear that “I am not resigning from Stream. I am terminating Stream for unacceptable performance.”

With this goodbye, Codrey joined hundreds of other former employees who have escaped their Stream cubicles through the company’s revolving door. Turnover is expected in the call center business, but Kalispell city officials say the numbers fleeing Stream are higher than anyone anticipated.

Still, many Stream employees have stuck with it. They’ve bent into different positions in hopes of finding long-term careers with the company. Unfortunately, many of these employees were given their 60-day notices of termination on April 8. On that day, Stream announced it was laying off 245 Kalispell staffers at the beginning of June. Some of those staffers were later told their last day would be April 24, but that they would be paid through June 8.

Publicly, Stream blames poor economic conditions for the layoffs. Privately, upper management has reportedly told its employees that Microsoft is to blame—that Stream and Microsoft have restructured their contract, making it less profitable to handle customer service calls in the U.S.

Turns out, it’s cheaper for both Stream and Microsoft to handle their business in Canada. Stream hasn’t admitted this publicly, but this is also not the first thing the company has tried to keep quiet. From its campaign against efforts to unionize to the misleading tactics practiced by Stream phone agents, there’s a lot the company doesn’t want to talk about.

The city of Kalispell adds to the silence with its hands-off approach to managing its financial relationship with the company. City leaders doled out $4 million in public assistance to lure Stream to Kalispell’s abandoned Gateway West Mall. The city bought 50,000 square feet of the mall, worked out a business-friendly lease with Stream and agreed to reimburse the company for $2.75 million of its investment in the Kalispell site. Stream also received grant money from both public and private sources to pay for employee training.

In return, Stream is required to maintain at least 500 full-time jobs. Of those 500, around 40 percent are contractually required to pay $9 an hour or more, plus benefits.

According to documents certified by Stream alone, the company is meeting these obligations. The city double-checks some of the information provided by Stream, but not all of it. Kalispell officials say that until the recent layoffs, there were no warning signs, no reasons to worry that Stream was not maintaining a minimum number of jobs in Kalispell.

The city says it tracks the total number of employees working at Stream, but it has never checked what is arguably the most important number in a story full of numbers. It’s a figure that begins with a dollar sign: $9 an hour, the wage Stream agreed to pay “approximately 40%” of its employees.

Several current and former employees say that isn’t happening. City officials can’t say either way because Kalispell has never asked Stream to verify how much it pays the top 40 percent of wage earners at its local site.

Stream spokesperson Birgit Johnston would not address the specifics of the company’s contract with Kalispell, saying only, “We are in full compliance with the agreement.” The company has also stated publicly that it came to Kalispell in the first place because it could get away with paying low wages. Now, in light of the recent layoffs and statements reportedly made by Stream management, it looks like even those low wages aren’t low enough to satisfy the company.

Just over a year ago, Gov. Judy Martz and the Montana Ambassadors—a volunteer group of 150 business leaders from around the state—named Stream 2002 Montana Company of the Year. At the Ambassadors’ annual meeting in Missoula, Martz told an applauding crowd that “Stream is a strong global company committed to its employees.”

Two weeks ago, Stream demonstrated its commitment by laying off a third of its workforce in Kalispell. At the same time, the company is expanding at least one site north of border, where Canadian Stream agents make even less than those in the U.S.

“This is only the beginning of what will become something that is greater than all of us,” wrote Stream-Kalispell site director Mary Beaudry in a motivational greeting letter to new employees in 2000. After inking its deal with Kalispell and moving into the old Gateway West Mall, Stream went on a hiring spree. Over the next year, as many as 900 employees provided customer service for Stream’s client companies. In addition to Hewlett-Packard and MSN, Stream-Kalispell has also taken calls for the Internet venture eToys and the telephone company Qwest.

“Stream is a technical service center,” Beaudry continued in her greeting. “Many of the major computer hardware and software providers rely on Stream to provide world class customer care.”

Stream holds service contracts with some of the world’s largest high-tech companies. When customers run into trouble with their Dell or Gateway computer, or if they can’t make their Hewlett-Packard printer print, they get on the phone and dial a toll-free number. On the other end of the line is a Stream employee providing what’s known in the industry as “seamless customer care.” The customer is greeted as if he or she has reached Dell or Gateway or MSN. Even if asked, the customer service agent isn’t supposed to reveal that they actually work for Stream.

When agents come to work at Stream, they sign a confidentiality agreement that bars them from revealing the company’s clients. Likewise, those clients avoid questions from the press about their relationship with Stream. Hewlett-Packard and Microsoft, the most recent clients serviced by Stream-Kalispell, refused to comment for this story.

A pitch to potential clients on Stream’s Web site is equally discrete. It names no names, saying only, “It’s all about our ability to understand and manage the critical role that customer care plays in driving loyalty among your customers, and profitability to your bottom line.”

In other words, Stream is one place high-tech companies turn when they’re looking for a way to outsource customer service. The company maintains locations in Texas, Canada, Sweden, Spain, France, Italy, Japan, Germany, England and India. It brought Kalispell into its fold because it’s an isolated, rural community where the company can attract employees with a starting wage of only $7.50 an hour.

“The guy from Stream told me, ‘Do you know what we’d have to pay people in Dallas? A lot more,’” recalls City Councilman Randy Kenyon. “They came here because they wouldn’t have to pay people as much. The guy from Stream said that during a city council meeting. ‘We go where the wages are lower.’ He said that in front of 100 people.”

In the spring of 2000, Stream arrived in tractor-trailers and unloaded most of what it needed to turn a section of the Gateway West Mall into a high-tech service center. Silver City, N.M.—another isolated Western town willing to provide Stream with a cash enticement package—offered the company a vacant Wal-Mart building.

For entry-level employees, the difference between working at Wal-Mart and working at Stream is that new Stream employees make about $1.25 an hour more.

Initially, that was enough to lure workers away from service jobs in the Flathead. But this year, when Target opened a new store between Kalispell and Whitefish, it received 2,500 applications for 175 jobs. Starting pay: $6.25 an hour.

Some of those applying to Target were former Stream employees who burned out, were fired or otherwise soured on the company.

“I can’t imagine that there is someone in this valley who doesn’t know somebody who used to work at Stream,” says Councilman Kenyon, rattling off the names of several ex-Stream staffers.

One of those former employees is Vince Woodhouse, who ran unsuccessfully for the Montana House of Representatives after leaving the company in 2002. Woodhouse says his job at Stream started off well. He took calls for eToys and Qwest, and in 2001 Woodhouse earned a $1,500 bonus.

Then in September of ’01, Stream International was sold to a larger, high-tech service provider called Solectron. At the time of the acquisition, Stream repor-ted annual revenues of $323 million for fiscal year 2000. If this was good news, call agents in Kalispell couldn’t tell because following the Solectron takeover, their paychecks suddenly shrank.

“When Solectron came in,” says Woodhouse, “those quality bonuses, they were gone.”

Based in Milpitas, Calif., Solectron operates assembly lines for computer companies, building everything from mainframes to laptops. Because it often builds the products customers call in with questions about, adding Stream to its family of outsourcing services made sense. Solectron can now perform a full spectrum of behind-the-scenes work for the technology industry. The label might say Dell or HP, but the product may be both built and serviced by Solectron.

In Kalispell, Stream’s sale to Solectron was accompanied by the arrival of a new site director: Matt Skuodas, a youthful thirtysomething who told the Daily Inter Lake that he planned on “building an empire” in Kalispell. Last year, it looked like Skuodas wasn’t kidding; local headlines read “Stream to add 200 new employees to work force.”

Some of those hired went to work on the contract with Microsoft’s MSN network. MSN provides Internet dial-up and DSL service and is a rival of America Online. In its efforts to compete with AOL, MSN turned to Stream-Kalispell as a cost-effective source for customer and technical support. The Kalispell site was so successful, it was called upon to assist the Stream call center in Chilliwack, B.C. as the newer facility came up to speed on the MSN contract.

MSN was pleased by Stream-Kalispell’s performance. Just this month, MSN’s director of technical support praised the staff in Kalispell for its “consistent, predictable, high-quality, and reliable service.” In the same e-mail, Stream-Kalispell employees were told they were “truly making a difference.”

This pep talk came three days after termination notices were handed out to staffers working on the MSN contract. On April 8, 245 employees received a letter from site director Skuodas, who wrote: “As we are all aware, economic conditions have presented the technology industry with significant challenges. In some cases, this has caused some of our clients to re-evaluate their business needs. Unfortunately, a client decision has been made to relocate existing business from our Kalispell facility to elsewhere.”

That client is MSN. By “elsewhere,” Stream means Canada and India, according to statements reportedly made to staff members the day of the layoffs.

“He said the client wanted to go ‘off-shore,’” says Stream call agent Dan Nelson, recalling a question-and-answer session between Skuodas and several other employees. Skuodas did not respond to repeated requests for an interview. But Nelson says Skuodas discussed the layoffs and the MSN contract in detail on the afternoon of April 8.

“Matt [Skuodas] said that if there is other MSN business, then it will go to Canada,” says Nelson, who will end up putting in three years with Stream by the time his job is eliminated on June 8. Nelson works on the technical, Internet connection portion of the MSN contract. It’s this type of work that is reportedly moving from Stream-Kalispell to the company’s site in Chilliwack B.C. or to some other Stream facility in Canada. Other non-technical service complaints from MSN customers will be re-routed to another, non-Stream call center in India, says Nelson, recounting his conversation with Skuodas.

None of this can be confirmed with Solectron or Stream or MSN, which are saying as little as possible about why Kalispell is losing 245 jobs. Solectron spokesman Matt Roszell insists the Kalispell layoffs are “not due to a customer loss at Stream International,” meaning Stream still has its contract with MSN. Instead, they are due to “a reduction in customer demand,” meaning fewer calls are coming in from MSN customers.

After announcing the layoffs at Stream-Kalispell, according to Nelson, Skuodas told employees that he was “shaking down trees” looking for new business in an effort to save jobs. Skuodas also allegedly told the staff that news of the layoffs came as a total surprise, even though just last month Stream let go of 400 employees—half the workforce—at the company’s site in Silver City, N.M.

Those recently let go at Stream-Kalispell might be surprised to learn that while Skuodas was shaking down trees, Stream-Chilliwack in B.C. was bringing in so much work it’s now looking for additional office space. At one point, the demand for agents working on the MSN contract was so great that desks and phones were moved into rooms previously dedicated to staff training.

“The problem is our building is max capacity now,” wrote a Stream-Chilliwack employee during a recent instant messaging session with a Stream-Kalispell employee.

“They’re growing like crazy. They’re the largest employer in Chilliwack,” reports Rick Collins, editor of the Chilliwack Progress, a tri-weekly newspaper in British Columbia.

At the beginning of June, when Stream-Kalispell cuts staffers currently working on the MSN contract, its total payroll will number around 450. In Chilliwack, the payroll was reported in October to be at 1,400 and growing.

Stream’s parent company, Solectron, may see the layoffs in Kalispell as part of a wider effort it announced in a March 20 press release, which hinted at the coming layoffs while reporting a $111 million loss for the quarter ending Feb. 28.

“To help drive the company’s return to profitability,” the release stated, Solectron intends to “consolidate facilities and reduce the workforce in Europe and North America.”

The Solectron press release, which was distributed three weeks before the layoffs were announced in Kalispell, says nothing about Stream jobs moving to Canada. But, if cutting costs is one of Solectron’s current goals, then consolidating Stream’s workforce in Canada makes sense. According to press reports in British Columbia and Ontario, Canadian Stream employees make at least $1 an hour less than Stream staffers in the U.S. And as anyone who’s worked at a call center can attest, the customer service business is more about dollars than service.

On its Web site, Stream International boasts that its 11,000 agents “enhance more than 40 million customer experiences a year.”

Each of these experiences is analyzed and broken down by a system of managers who listen in on calls and walk the call center floors. Those walking the floors are known as “roamers,” and if you’re an agent, and you see one coming, it’s time to hang up.

Roamers are enforcers. It’s their job to keep call lengths under a set time limit that has nothing to do with problem solving and everything to do with making Stream money. Stream gets paid by MSN for every minute one of its reps spends on the phone with a customer. For non-technical customer service calls, the limit might be 4.5 minutes, and for tech-related calls, as much as 12 minutes.

Stream managers openly discuss the MSN contract with agents on the floor. The agents understand that the contract with MSN makes something known as “average call time” a higher priority than actually solving the problems presented by customers on the other end of the line. That’s because the rate per minute that MSN pays Stream goes down as Stream’s average call time goes up. So under the contract, Stream gleans the most profit by generating lots of short calls.

“They quite frankly didn’t care how many times a customer calls. They get paid again, so why solve the problem?” says Betty McGillen, who was considered an old-timer at Stream when she quit after two years on the job. Many employees last only a few months, especially on the MSN contract, where they say the dual pressures of angry customers and hovering bosses combine to create an extraordinary level of job stress.

To succeed at Stream—where bonuses are tied to keeping average call times low—many agents learn to “punt” callers. “That is the terminology they used,” says McGillen. “Once you’ve done teching, you know the ways to get rid of a caller.”

Punting means misleading customers just enough to get them off the phone. According to Stream employees, punting tactics include making up phony passwords, and instructing the MSN Internet customer to hang up and give the bogus code a try.

Once punted, it’s only a matter of time before frustrated customers call back and sternly ask to speak with a supervisor. According to a posting on the industry Web site DSLReports.com, this is called a “sup call.”

“Sup calls may get you a higher level technician, or you may get a ‘supervisor’—just another technician—playing a ‘non-technician’ role trying to calm you down and send you back to the original tech. Under no circumstances will you get anyone technically classified as a boss,” writes an anonymous MSN call center tech.

The anonymity of the Internet gives call center agents around the world a place to vent. In one posting, a former call center employee said she hated her job so much that she “may never use a phone again.”

At Stream-Kalispell, that kind of discontent seems to be concentrated mostly among the workers assigned to the MSN contract. Looking to boost employee morale, site director Skuodas sent out an e-mail in September asking for suggestions about how to make life at Stream-Kalispell more “FUN!!!”

The agents wrote back, complaining about the company’s decision to cut raises and benefits and bonuses. They noted that what was once a 5 percent matching 401(k) plan is now down to less than 3 percent. At the same time, the company cut back its contribution toward health benefits. Where it used to pay 75 percent of each employee’s health insurance premium, it now pays only 50 percent. Add to this a 3 percent cap on annual raises, and the compensation package touted by the city when Stream arrived in 2000 looks a lot less generous in 2003.

In lieu of a bonus or significant raise, Stream-Kalispell agents were recently invited to throw pies at the managers of their choice, according to current employees who witnessed the event and its aftermath. Chocolate and banana cream pies were reportedly distributed to employees just days after they were given their termination notices. The soon-to-be-jobless Stream staffers gathered in the “smoker’s cage” break area while a select few pelted site director Skuodas and other managers with the pies.

“The pudding was all over the place,” recalls one employee.

Some of those at the pie throwing are currently taking home less pay from Stream than they did two or three years ago. Worried about cuts in pay and benefits, a group of employees tried to organize under the International Brotherhood of Electrical Workers (IBEW) union.

“This year I got 11 cents more a day or something ridiculous like that,” says former employee Jeff Greenlee. “If Stream had to bargain, they wouldn’t get away with stuff like that.”

When word got out about employees organizing last summer, Stream employee Jennifer Jeffrey says she was called into a room by her bosses. There she says she was told by Stream management, “If the union comes into Kalispell, then we’re out of here.”

Others confirm Jeffrey’s story, saying they too were pressured by management to shun IBEW efforts to organize. At the CenturyTel call center in Kalispell, where the IBEW is long established, call agents can make as much as $19 an hour. But call centers are notoriously difficult to organize, and Stream-Kalispell has been no exception.

The IBEW’s Larry Langley says response to the union’s efforts at Stream has been “really weak. I mean extremely weak.”

“Employees are afraid that if they get identified in any way as pro-union, then they’re gone,” says Langley, adding that employees are less inclined to support a union when there’s a prevailing sense among the workforce that the employer might pick up and move at any moment.

“I question their commitment to the community. Their investment in the community is minimal for the size of operation they have,” says Langley.

Since the late 1990s, call center operations have targeted isolated rural communities where, according to a 1998 report in The New York Times, “They employ moderately skilled people, a large number of them, at a lower cost than you would employ those same people in a larger urban setting, and at a much lower cost for the land and buildings.”

Cities like Kalispell lower the costs even more when they put up public funds in an effort to lure companies like Stream International. Langley worries that given Stream’s “minimal” investment in the Kalispell site, it may one day be cost-effective for the company to “just pull the pin and go.”

That’s not going to happen, says Susan Moyer with Kalispell’s Community Development Department. City officials received a courtesy call from Stream announcing news of the recent layoffs. Moyer says the city was assured that “This is going to settle down. [Site director Skuodas] was confident that business will pick up and that Stream is staying.”

In order to avoid forfeiting reimbursement money allocated by the city, business needs to pick up enough for Stream to maintain a workforce of 500. And of that 500, 40 percent need to be working in what’s known as a “tier II” position. Current and former employees, whether they love Stream or scorn the company, offer the same response when asked if 40 percent of the workforce has consistently worked at tier II and earned at least $9 an hour, plus benefits. They say: “No way.”

“No, no, no. Flat, period, no,” says Debbie Mota refuting the city’s assumption that Stream is employing 40 percent of its employees at tier II wages. “Tier II may be a title, but there’s no more money for that title.”

Currently, the city can’t say whether or not Stream is fulfilling what many consider to be the most significant portion of its contract with Kalispell.

City Manager Chris Kukulski says ensuring that Stream is providing not just jobs, but good jobs, is one of “two or three key components of the agreement.”

But until the recent layoffs, Kukulski says, the city felt confident about the information provided by Stream and saw no need to pay for a formal audit.

“Now we will have to look with a finer magnifying glass,” says Kukulski. “How are we verifying that the tiers are happening?…We need to hold their feet to the fire on that.”

According to Stream’s most recent self-audit, which covered the employment period of December 2001 to February 2002, the number of tier II employees working at Stream was 298, or 42 percent of the workforce. Nowhere on the document submitted by Stream is any mention of what tier II employees are paid. The self-audit document lists only a “lowest hourly wage,” which is $7.50 an hour.

The city says it plans to review Stream’s next self-audit with an eye toward the exact amount being earned by tier II employees. Some of those employees will be out of a job come June 8, bringing into question whether or not Stream can maintain a workforce where “approximately 40%” are earning $9 an hour or more.

Joe Pourroy never earned $9 an hour at Stream, but that didn’t dampen his enthusiasm about working for the company. Sure, there was plenty of job stress and rumors run wild. The most recent whispers between cubicles turned out to be true. For the last few months, Stream-Kalispell employees speculated that layoffs were on the horizon. Pourroy says team managers and select employees were suddenly transferred from the MSN contract to the Hewlett-Packard contract, and that created a buzz among the agents.

“You can feel there’s tension in the air when your TM [team manager] moves over to HP. You know something’s going on,” says Pourroy, adding that the most recent word among Stream agents is that Kalispell might become a site dedicated exclusively to serving Hewlett-Packard contracts. HP is Solectron’s largest client.

That may turn out to be good news, as those working on the HP side of Stream-Kalispell report far more job satisfaction than those taking calls from MSN customers. The Independent spoke with some of these current employees, who had only positive things to say about their experience working on Stream-Kalispell’s HP contract. The contract provides tech support for HP printers, fax machines and CD burners. One employee said, “It’s just a lot more satisfying really helping the customers.”

Pourroy found plenty of satisfaction in his job at Stream. “I absolutely loved it,” says Pourroy, who left Stream reluctantly, and with an odd memento. It’s a “rubber snake looking thing” with the Stream company logo printed all over it. Pourroy’s bosses called the toy “a stress reliever,” and to this day, when something doesn’t go Joe’s way, he says, “I grab hold of it and start twisting.”

Pourroy had tried to get his very own Bendy doll while he worked at Stream. But by the time he got around to asking, the company had no more left to give.

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