German online platform Otto is eliminating 480 call center positions. This results in layoffs of hundreds of employees. Several of the company’s customer service locations will be closed completely.
One of the biggest online stores in Germany, Otto, is having financial trouble. The company opened its website to third-party sellers in 2020, becoming an online marketplace with that move. In spring 2024, Otto wanted to open the marketplace to sellers in Europe.
However, in that summer Otto also increased its seller fees drastically, from 39.90 euros to 99.90 per month. In September 2024, German newspaper Handelsblatt wrote that 1,178 sellers deleted their accounts in the five months before that point.
AI bots taking over customer service positions
And now, Otto needs to cut costs. According to the company, its customer service is not profitable. Customer support through telephone seems to be less relevant to the company. Most issues are now resolved via email, support forums and with the help of chats or AI bots.
The company will suspend operations in 13 customer service locations
Because of that, the German marketplace is cutting is call center jobs. At least 480 positions will be eliminated. By the end of august, the company will suspend operations in 13 of its customer service locations.
‘Maximum severance pay now determined’
A total of 700 customer service employees will remain. The affected employees will receive severance pay. The company has now determined the maximum amount. The company is also looking at other ways to save money.
