Otto Lays Off Nearly 500 Call Center Employees Amidst Economic Challenges and Changing Customer Behavior
Hamburg, Germany – E-commerce giant Otto has announced the layoff of approximately 480 call center employees, citing factors such as intensifying competition, Germany’s sluggish economy, and evolving customer preferences.
The company disclosed that the decision was made after determining that the existing call center structure was no longer financially viable. As a result, Otto plans to close eight of its thirteen customer service locations by August 31st.
Impacted Locations and Employee Support
The affected locations include Alzenau, Bad Salzuflen, Bochum, Niederzier, Kassel, Leipzig, Stuttgart, and Nuremberg. Otto confirmed that approximately 700 employees will remain in the customer service department across five remaining locations: Magdeburg, Neubrandenburg, Hamburg, Dresden, and Erfurt.
To mitigate the impact on laid-off employees, Otto has pledged to provide severance packages or facilitate their transfer to a "transfer company." This type of organization temporarily hires employees, provides further training, and aims to reintegrate them into the workforce. Additionally, Otto will supplement the so-called "transfer short-time work allowance."
Declining Significance of Phone Contact
Otto attributed the decision to lay off employees to several factors, including a decline in the importance of phone contact as customers increasingly prefer alternative communication channels. The company noted that this shift was driven by factors such as the rise of chatbots, social media, and email.
External Partnerships
Otto also indicated that it will continue to rely on external partners for additional customer support. The company did not provide details on the specific partners or the extent of their involvement.
Economic Pressures
The layoff announcement comes amidst concerns about Germany’s economic outlook. The country’s economy has been affected by factors such as the ongoing war in Ukraine, rising inflation, and supply chain disruptions.
Impact on Employees and the Local Economy
The layoffs will inevitably have a significant impact on the affected employees and their families. It could also affect the local economies in the areas where the call centers are being closed.
Future Plans
Otto did not disclose any plans for future hiring or changes to its customer service operations. However, the company is likely to continue to monitor the evolving customer behavior and economic landscape to adjust its strategies as needed.
Conclusion
Otto’s layoff decision is a reflection of the challenges facing many businesses in today’s rapidly changing economic and technological environment. As customer preferences and market conditions fluctuate, companies must adapt their operations and workforce to remain competitive.
