Two recent news stories illustrate the serious challenges that Virginia and the Greater Washington area face as funding for War on Terrorism winds down and economic uncertainties remain.
Lockheed Martin announced this week that it was laying off more than 150 workers in Hampton Roads this week, most of them related to the closing of the U.S. Joint Forces Command in Norfolk and Suffolk. The layoffs are the latest in a slew of what could be tens of thousands of jobs lost in the Old Dominion, which ranks first among the states for government procurement.
As defense jobs wind down, however, old economic development standbys are also faltering. Just as Lockheed Martin was announcing its cuts, QVC Inc., the home shopping network, was announcing that it was laying off 370 regular employees in Chesapeake, along with 230 contract workers. The reason? More customers are shifting to making their purchases on the Internet rather than calling them in to a customer representative.
What’s especially troubling about the news is that defense and call center jobs represent the yin and yang of Virginia business. With its proximity to Washington and its sprawling military installations and shipyards, Virginia has benefitted mightily from defense spending. The state enjoyed hundreds of millions in new spending, especially among Northern Virginia military and intelligence information technology firms, after the 9/11 terrorist attacks.
Yet with the wars in Iraq and Afghanistan winding down and the enormous political pressure for budget cuts, military spending is on the wane. In recent months, layoffs have been announced at ITT Exelis in Roanoke, BoozAllen Hamilton in McLean and SimIs Inc. in Portsmouth. As the Lockheed Martin announcement shows, more are on the way.
When better paying jobs disappear, economic development officials have used call centers as a stop-gap measure to help out hard-pressed communities. This has been especially true in Virginia in Southside, where global trade has decimated the textile and furniture industries, and in the Southwest, where the cyclical nature of coal mining, along with its growing automation, has created big gaps in employment.
For several decades now, their panacea for new jobs has been to invite companies that need call centers, such as retailers, insurance firms and other service providers. Call centers do not need a highly educated workforce with tough-to-get security clearances. They need hard-working, dependable people.
Call centers have always been dangerous solutions since they are often the first businesses to shut down in an economic slump. And as the QVC case shows, technology is surpassing them.
Many in Virginia have never acknowledged the debt they owe to the federal government in terms of the jobs it provides. They are about to get an education. Since call centers won’t be their salvation, they had better start thinking creatively about finding new ones, and fast.