UPDATE: Startek Expects the Effect of Contract Reductions to Result in a Material Revenue Decline Beginning in Q1 2012

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On February 7, 2012, StarTek, Inc.
SRT
received written customer notification of an intent to reduce its business in the Company's Decatur, Illinois and Jonesboro, Arkansas facilities. The reduction is expected to occur over the next two months and is expected to result in an aggregate reduction of approximately 380 full-time equivalent agent positions. As a result of this notice, one contract will be terminated and one other contract will see reductions. Although the termination and reductions of the aforementioned contracts and each of these facilities in and of themselves do not represent a material reduction in the Company's revenues, we expect the cumulative effect of these reductions to result in a material revenue decline beginning in the first quarter of 2012 and extending into the early part of the second quarter of 2012 as these operations wind down. We are actively selling the capacity that we have in those facilities to other clients. However, if we are not successful in doing so, we may decide to close one or both of them. In that event, there could be impairment and restructuring charges which would depend on which facilities are closed and when.
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