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Call centre giant Garlands goes into administration

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20th May 2010
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The biggest call centre group in the North East of England has gone into administration after losing two of its largest contracts, leaving more than 1,100 staff on the dole queue.

Garlands Call Centres, which was set up two decades ago and at its peak employed more than 3,000 people, foundered after losing major contracts with Vodafone and TalkTalk within a matter of days of each other.

Almost all of the company’s 1,158 workforce employed at its Hartlepool head office and in contact centres in South Shields and Middlesborough were made redundant with immediate effect. About 70 personnel have been retained to handle the company’s one remaining contract and to carry out administrative duties.

Chey Garland, who originally set the business up in the attic of her home, told North East Business: "It’s like a dream and I just feel awful. My main thoughts are with my staff. We made sure we paid them on Friday, but now I am wondering how they will pay their mortgages and find another job."

She added that the contracts had been lost because the industry had been both hit by the economic downturn and undercut by overseas competition.

But staff were reportedly angry that the news had been announced over the in-house radio rather than face-to-face and were bemused by the fact that Garlands had been recruiting staff up until quite recently.

PricewaterhouseCoopers in Leeds have been appointed as the administrators and expect to either wind down or sell the operations over the next few weeks. Nick Reed, joint administrator and one of the firm’s directors, confirmed that Garlands had experienced "very challenging" trading conditions and recently received notice from a number of key clients that they intended to move their customer service work elsewhere.

"The Garlands’ board were unable to identify a viable way forward given the significant deterioration in contract work and high infrastructure costs. As such, they were left with no option than to appoint administrators," he added.

Vodafone said it was "disappointed" by the collapse of an organisation that it had worked with for many years, but had invoked contingency plans to ensure that customer service was not disrupted.

TalkTalk, on the other hand, said that "decreasing call volumes and improvements to our internal processes" had resulted in falls in customer call centre traffic, which led it to end its relationship with the firm.

"TalkTalk has enjoyed a very productive relationship with Garlands and our decision to terminate our contract is purely based on the changing needs of the business," it added.

 

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