According to the Seattle Times, United Airlines plans to close its reservations call center in Kent, Washington, a move affecting 400 workers.
Other call centers around the world, including in India, will handle the work after the Kent center closes June 4, United said.
Currently United is Kent’s fourth-largest employer.
The move comes as United, under bankruptcy protection since December 2002, is grappling with high fuel costs, low passenger revenue and competition from budget airlines, the airline said.
United said all of the Kent workers – reservations agents and supervisors – would be offered jobs in other reservations offices in Chicago, Washington, D.C., Detroit or Honolulu, with United paying moving costs.
Workers who turn down a transfer will receive severance payments based on years of service and position. Both the relocations and severance are required by a labor contract United has with the International Association of Machinists and Aerospace Workers.
“We’re in the process of restructuring the business so we’re constantly looking for ways to reduce the cost,” said Jean Medina, a United spokeswoman in Chicago.
United’s work force has dropped to about 60,000 from 100,000 before the Sept. 11 attacks, she said.
“This is not a happy day for us,” Alan Wayne, United's director of governmental and public affairs, told the King County Journal. Wayne called the mayor's office Tuesday to inform city officials of the company's plans to close the call center.
Wayne said the decision was made in an effort by the nation's second-largest airline to cut costs amid rising fuel costs and “depressed passenger revenues.”
Despite reporting record passenger traffic on its flights in recent months, United said its net losses also have risen because of soaring fuel costs.
United's parent company, UAL Corp., has been in Chapter 11 bankruptcy protection since December 2002.
The company is seeking to cut at least $2 billion in annual costs in hopes of exiting Chapter 11 in the second half of this year, according to Bloomberg News.
A series of wage reductions, the latest a temporary cut ordered in January, lowered the top scale of pay at the center to $18.33 an hour. United is seeking permanent cuts in wages and benefits.
The company has cut 456 workers in the Seattle area since October 2001, with the last round of layoffs here taking place in July 2003, according to state Employment Security Department records.
United is one of several major U.S. carriers that have raised fares on round-trip domestic flights in recent weeks. In March, the company also canceled an order for a Boeing 777-222 jetliner that had a list price of $186 million.
David Sims is contributing editor and CRM Alert columnist for TMCnet.
To discover how contact centers can save money and increase productivity by making the switch to IP Telephony, be sure to attend TMC's IP Contact Center Summit May 24-26, 2005, in Dallas, Texas.