Unpredictableoutsourcingmarket led toStream pull-out

Invest NI chief Alastair Hamilton says the unpredictability of outsourced contracts which fuel call centres led Stream Global Services to slash jobs in Londonderry in 2011.
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The state jobs promoter said he wasn’t making excuses for the company but acknowledged that’s how the industry worked. He also said the galling - to Londonderry onlookers - announcement that Stream was to create 1k jobs in East Belfast two years after pulling up pegs here was down to the acquisition by the Minnesota firm of another company, which Invest NI had been working with for months.

Stream acquired LBM Intelligent Contact in February. Invest NI had been hoping to facilitate the promotion of a number of jobs through LBM anyway. But when Stream bought the company the number rose considerably.

Mr Hamilton was quizzed about the seemingly incongruous behaviour of Stream Global Services by Mid Ulster MLA Sandra Overend.

At a meeting of the Investment Committee at Stormont she said: “You talked about the Stream project, and Stream cut jobs in Londonderry in 2011. We subsequently had its announcement of almost 1k jobs in Belfast. Invest NI said that that was not a transfer of jobs, but, at the same time, when you report on jobs, we see only the jobs created and not those lost. That question is double-barrelled; I want clarification of the Stream project and to know why we do not see the figures for lost jobs.”

He responded: “I was involved in both sides of Stream’s downsizing of its operation in the north-west. The answer has been given, but I will repeat it: we started what turned out to be the Stream project with another company - LBM - in Belfast. We were at a very advanced stage of discussion with it. Notably, although it was a sizeable project, it was, at that stage, for a lot fewer than 993 jobs.”

He explained that LBM went through a period of non-disclosure with Invest NI as it hammered out a deal with Stream.

“Our project went cold for six months because it was taken up with that conversation. It was not made public, but once it had concluded that deal, it came back to us,” he said.

Mr Hamilton also made observations on Stream’s downsizing in Londonderry. The call centre - once one of the city’s biggest employers with a workforce of up to 1k - effectively shut up shop in Londonderry in 2011, although the company privately informed Invest NI in 2011 it would continue to maintain a business function in Londonderry.Mr Hamilton said call centre operators like Stream are critically dependent on contracts outsourced from other industrial sectors. When they dry up, jobs dry up.

He said: “I am not making excuses for firms that have created employment and have then gone.

“However, you need to understand that, in the context of call centre or customer support operations, those firms bid for projects with telecommunication companies, TV companies, banks and so on.

“They win a contract for a finite period, perhaps three or five years, at the end of which many of them successfully re-sign that contract. However, if they do not do so, they will not need the level of employment that they had in the past. I am not making excuses for them, but, in essence, you need to understand that what fuels such call centre operations is not work for their own organisations but contracted-out work on behalf of other businesses,” he said.

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