May 2, 1995 in Nation/World

Egghead To Shift Jobs To Spokane Will Close Customer-Service Centers In Kalispell And Issaquah

Grayden Jones Staff writer
 

Egghead Software said Monday it will close customer-service centers in Kalispell, Mont., and Issaquah, Wash., and move them to its Spokane Solutions Center.

The move eliminates 250 jobs in those cities, although Egghead said it will invite displaced employees to apply for relocation to the Spokane center near Liberty Lake. A severance package also will be offered.

The consolidation will occur in June or July.

Top Egghead officials could not be reached for comment, or to discuss potential employment gains in Spokane. The company has scheduled a press conference today in Spokane.

“This is wonderful,” said Susan Meyer, executive director of Momentum ‘95, which helped recruit Egghead to Spokane. “This signals that they’re happy here with the community and the work force.”

Egghead, the nation’s largest reseller of computer software, said in a statement that the move will cut operating expenses by $1.6 million a year “due to competitive labor market rates and lower real estate costs in Spokane.”

But the company is abandoning a prestigious 26,000-square-foot office building in Kalispell purchased 18 months ago for $1.7 million.

Officials in that community of 11,000 people said it’s unlikely another tenant with the technological requirements of Egghead will come along soon.

“There’s enough wiring in that building to wire a small city,” said Kalispell Mayor Doug Rauthe. “We’ll absorb the loss with some degree of difficulty.”

The company opened its Spokane operations in January, hiring 130 workers from an applicant pool of about 2,000 people.

Egghead at that time said it had no plans to move its Kalispell and Issaquah operations to Spokane, though it bought a 115,000-square-foot building in the MeadowWood Business Park. The building, listed for $5.5 million, was twice the size Egghead needed.

Two economic development organizations - Momentum and the Spokane Area Economic Development Council - cemented Egghead’s decision by contributing $225,000 toward the purchase of two acres adjoining the Liberty Lake building. Egghead said it needed the property for future expansion.

Egghead will move its telephone customer service and credit and collection office from Issaquah to Spokane.

From Kalispell, the company will move its 1-800 Egghead Sales and MAC’S Place mail-order catalog operations. Rauthe said the office has 75 to 100 employees.

MAC’S was founded in Seattle and moved to new national headquarters in Kalispell in late 1993. Since then, the division was renamed twice and the founder fired.

Egghead estimates that it will pay out $1.8 million to $2 million for severance packages this year.

However, with operational savings in Spokane taken into account, the net cost of consolidation should amount to $800,000 in fiscal year 1996, Egghead said. Those costs will show up in the company’s first and second quarter earnings reports for fiscal year 1996, which began April 2.


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