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Office Depot Will Cut Call Centers, Lay Off 900 By ’05

Office Depot will begin outsourcing its inbound call center and outbound account management functions, resulting in the layoffs of 900 employees and the shutting of three of its eight telemarketing facilities.

The move, which is expected to be completed by next September, will cost the company about $12.9 million in severance and facility exit costs, but is expected to save some $15 million a year in overhead.

The belt-tightening comes on the heels of a reported 2 percent dip in third-quarter earnings and the departure last month of chairman/CEO Bruce Nelson. Nelson was succeeded on an interim basis by board member Neil Austrian, who blamed the chain’s poor financial performance on a lack of execution, focus and accountability (see TWICE, Oct. 11, p. 10).

The layoffs will affect call centers and offices in California, Connecticut, Georgia, Kansas, Ohio and Texas. In a Security and Exchange Commission filing, Office Depot said that “a large number” of the pink-slipped employees will be offered positions with the third-party providers or work from home.

A portion of the call center and account management activities will also be consolidated into two existing facilities in Boca Raton, Fla., and Norcross, Ga., the company said.