Teleperformance France Reduces Contact Centers

News Source: Nelson Hall Industry Comment

Teleperformance France has announced that the "cost control measures implemented in 2009 (fixed cost reduction and voluntary redundancy plan) haven't enabled the company to recover during the economic crisis, and the results have worsened" with the company now "facing a situation of structural production overcapacity".

In response, Teleperformance is planning to reduce its number of contact centers in France from 22 to 14 and reduce its headcount by 15%. The restructuring project submitted to the works council includes:

o The closing of 4 centers with job redundancies: Marseille (25), Pantin (149), Rennes (194) and Tours (51).
o The consolidation of four centers, by merging 2 centers into one, reducing their headcount by: in Le Mans (41), Lyon (169), Orléans (71) and Toulouse (61)
o The downsizing of the Bordeaux center, reducing the headcount by 69.

The fourteen remaining Teleperformance contact centers in France are located in Belfort, Bordeaux, Guyancourt, Laval, Lyon, Le Mans, Montpellier, Niort, Orléans, Paris, Reims, Toulouse and Villeneuve d'Ascq (2).

Analyst comments:
Teleperformance's revenues in Q1 2009 outside of Brazil continued to decline, with the company's revenues in Continental Europe, Middle East and Africa exhibiting the worst decline at minus 7.3%. While Teleperformance is not alone among the major customer management services in exhibiting this level of revenue decline, the continuing drive to offshore delivery and reduced client transaction volumes has continued to exacerbate, rather than rescue, Teleperformance's already unacceptable financial performance in France.

Teleperformance had already taken some steps to turnaround its French operations by replacing its country management and developing a renewed operational focus through a return to management "by walking around" and greater employee engagement. However, a more fundamental restructuring was clearly required to address the considerable losses in France, and the company's restructuring proposals are now being presented to its French works council.