Call centre operator Garlands has gone bust after Orange, Vodafone and Talk Talk terminated their contracts with the Teeside firm.
More than 1,000 jobs have been lost at the company which has call centres in Middlesbrough, Hartlepool and Sunderland.
The three contracts were all pulled within the space of a month, dealing the final deathblow to Garlands. The company claims that much of the work pulled by its clients will go
to 'low wage countries, including Asia and Africa.'
Garlands was forced to cut staff numbers from 3,000 to 1,500 in 2009 after some of its mobile and broadband clients transferred a swathe of work from Garlands to rival overseas call centres.
This latest loss of business proved to be the final straw, forcing the company to call in administrators PricewaterhouseCoopers.
In a statement Garlands said the administration ‘follows decisions by a number of Garlands' largest clients to move their outsourced customer service activity to other centres, many in low wage countries including Asia and Africa.’
It added: ‘In 2009 the company was told that it had lost much of its work for its large broadband and mobile operator clients as these companies sought to take cost out of their businesses. Despite battling extremely hard - and in difficult economic conditions - to gain new business to replace this work, the company was left with contracted work for only 1,500 employees by early 2010.
‘In the last month, three of these mobile and broadband clients served notice that they are to move further customer service work out of Garlands - leaving the company with infrastructure and overhead costs that the business cannot afford going forward.’
An Orange spokeswoman said: ‘We are really sorry to hear that CJ Garland has found itself in this situation. Orange accounted for a small part of CJ Garland’s business.’
A Vodafone spokeswoman also expressed regret at the news. She added that Vodafone’s decision to terminate its contract with Garlands was ‘a commercial decision and there was no other reason than that. We were perfectly happy with the work they were doing with us and until this happened we were expecting to work with them for a number of months more’ She added that the work ‘will be redistributed among our estate – some inhouse and some with other partners.’
Garlands had dealt with credit collections for Vodafone. This week outsourcing company HEROtsc told Mobile it is planning to create 250 jobs at its call centre in the Dearne Valley near Rotherham dealing with credit collections for Vodafone as part of its extended partnership with the operator.
Outsourcing has been identified as a key pillar in Vodafone’s £1bn cost cutting programme.
TalkTalk attributed its decision to pull its contract with Garlands to falling call volumes. A spokeswoman said: ‘As a result of decreasing call volumes and improvements to our internal processes, contacts from customers into our Customer Service teams have reduced.
'Therefore, we have decided to terminate our contract with our UK outsourcing partner Garlands. TalkTalk has enjoyed a very productive relationship with Garlands and our decision to terminate our contract is purely based on the changing needs of our business.’
TalTalk said it was looking at ways to split the work across 'onshore and offshore' call centres.
Vodafone declined to reveal where it was transferring its work.