IDT J'lem's future uncertain after hundreds of layoffs

Staffers claim telemarketing firm is losing clients; company stays silent.

By BEN SALES
call center 224.88 (photo credit: Ariel Jerozolimski )
call center 224.88
(photo credit: Ariel Jerozolimski )
The future of IDT Jerusalem, a telecommunications company that employs hundreds of the city's English speakers, is shrouded in uncertainty, following the laying off of hundreds of management personnel and telemarketers since the beginning of May. A former project manager who lost his job last month, and who asked not to be named because of the sensitivity of the issue, said that the layoffs, which began as a cost-cutting measure, resulted in IDT clients losing confidence and withdrawing their business, which in turn has led to more layoffs. The Jerusalem office is part of IDT Global Services, a subsidiary of IDT, and functions as an international English-language call center for worldwide clients. Based in the Har Hotzvim industrial zone near Ramot, the Jerusalem office, according to the former project manager, has lost an average of $4 million a year since its opening in 2002, despite the overall company's profitability. Since its founding by American businessman Howard S. Jonas in 1990, the IDT parent company has earned steady annual profits, although it lost $82.2m. in the third quarter of fiscal year 2008. "Client confidence [in Jerusalem] is starting to fall off," the former project manager said. Clients are "starting to pull the plug." The initial layoffs, he said, were designed to make management more efficient; the people staffing the phones were not supposed to be affected. "But now things out of [IDT's] control are happening." Several current and former IDT staffers said Jerusalem office CEO Eli Ninio was giving the branch until July 1 to start making money, and might close the office should it not meet the deadline. Contacted several times, IDT declined to comment on this matter or other aspects of its operations here. Its Israel office said it was not authorized to comment, and its American headquarters would not respond to inquiries. An IDT telemarketer, who also asked to remain anonymous, confirmed that several clients had withdrawn their business recently, and said the notion of a July 1 "deadline" was widely discussed among staffers but that the company had told them nothing. "They've said only that they're doing everything they can to keep our [specific] project," she said. However, she also noted that fluctuations in staffing levels were normal at IDT, where employment depends on how many projects the office has going. "People come when a new project opens up and when it's done, they leave," she said. John Burlowitz, another former employee of IDT, who was laid off last month because a client withdrew his business, said Ninio had trimmed costs by closing down a company ulpan (Hebrew classes) and eliminating much of the administrative staff. Ninio, he said, has been "cutting back on all of the expenses that he didn't think were necessary. He thought that the ones who made the telephone calls did all the work." The former project manager estimates that some 300 people have been laid off in the last few weeks - a heavy blow to Jerusalem's native English-speaking workforce. Many of IDT's clients are based in the US, said Burlowitz, and they require telemarketers to speak fluent English. IDT, in turn, has been a natural employer for English-speaking immigrants who do not speak proficient Hebrew. "They need English speakers," he said. "Americans don't like to be called by people they barely understand. Americans don't want to listen to Israelis, because Israelis have a different way of talking to people." According to the telemarketer, Jonas is anxious to help new immigrants, and so has encouraged his Jerusalem office to give its workers better-than-average benefits, some of which, she said, are now being scaled back. "Jonas was giving a lot of benefits to Americans who moved here," said the telemarketer, who was born in Israel. "Now they've started giving fewer benefits" - including fewer days off. In addition to Jerusalem, IDT has international offices in the Netherlands, the United Kingdom and Puerto Rico. It is headquartered in Newark, New Jersey. Burlowitz, who was on a team working for a specific client, said that the team's management was laid off in the initial cost-cutting, which he believed led to the client canceling its deal. He was laid off soon afterwards. Ninio "went overboard," said Burlowitz, "and did irreparable damage." But the telemarketer countered this. She said members of the management had not been fired, but rather presented with new contracts that included pay cuts. They had the option of remaining with IDT under the terms of the new contract. "I think [the process] was fair," she said. "They didn't force anyone to leave." The situation now, said the former project manager, is one of lack of order in the office. There were incidents, he said, "where we had to call people who had been fired and ask them what we were supposed to to do. [The company] cut way too deep."