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Aradiant Pares Labor Costs With Move to Tijuana

A cross-border combination of companies has led Aradiant Corp. to move its San Diego call center and about 350 jobs to Tijuana.

“We’ll maintain our headquarters here (in Kearny Mesa) and still have American management and quality, and yet we’re taking advantage of the lower labor rate for the call center portion of it,” said Linda Hobbs, Aradiant’s chief executive officer.

This month, privately held Aradiant acquired a Tijuana customer care unit of Grupo Melo called Sistma de Communicacion Efectiva, SA de CV for an undisclosed price.

Hobbs said she has been talking to companies in several other lower-cost countries, including India and the Philippines, to arrange a transfer of the company’s main business operations but found the proximity of Tijuana a key reason for the deal.

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The Tijuana company, which has about 30 employees, has been handling an overflow of work generated by Aradiant for several months.

“Moving our operations to Mexico is a key component of our long-term strategic plan, which emphasizes growth while maintaining our commitment to quality,” she said.

Manufacturing jobs from the United States moving to lower-cost nations such as Mexico and China has been taking place for decades, but in recent years the job transfer has also included lower-skilled service jobs such as help desk support and call center operators.

Many major corporations such as Dell Inc., and smaller businesses are contracting with large Indian and Pakistani customer support firms where workers speak English, but are paid a fraction of the wages that American employees would command.


In Wake Of Dot-Com Crash

Hobbs said the trend toward outsourcing help desks and customer support functions gained momentum following the dot-com crash of the early 2000s when a large number of engineers and technically skilled employees in Silicon Valley lost their jobs and returned home to India to launch new businesses.

Alan Gin, a University of San Diego economics professor who compiles an economics index for the region, said it’s no surprise that help desk service jobs such as those at Aradiant are being exported outside the country.

“The only surprise is that they’re going to Mexico,” he said. “The question is what jobs are going to be left for Americans to do.”

Aradiant plans to transfer about a third of its work force, or 95 jobs, to Tijuana beginning in October and should complete the move of all its operations by February.

The new operations center should eventually grow to about 500 workers, who will provide services in English and Spanish to Aradiant’s customers, Hobbs said.

Most of Aradiant’s employees will not be crossing the border to continue working for the company, she said.

“We’re providing them with training and outplacement services to help them make the transition. And we’ve been contacted by other call centers in the area who are interested in hiring some of them,” Hobbs said.


Shifting Services

Aradiant, formerly called the National Dispatch Center, was founded in 1990 with its main business fielding phone and text messages and relaying them to cell phones or pagers.

But the gradual proliferation of cell phones and their ability to send and receive text messages cut deeply into Aradiant’s core business. In response to declining revenues, management began reinventing the business as one focused on customer care and technology support.

One of its largest customers is the San Diego Padres, which uses Aradiant for ticket sales services.

Hobbs wouldn’t reveal annual revenues for the company, but said it’s “significantly less” than its peak reached in 1996, when it did about $30 million in sales.

At one point in the late 1990s, Aradiant had more than 1,500 employees working from two buildings, but by mid-2002, the staff was about 650, and revenues had declined to about $22 million annually.

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