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Sykes Enterprises, Incorporated

December 13, 2005

VIA EDGAR

Ms. Kathleen Collins, Accounting Branch Chief

United States Securities and Exchange Commission

Division of Corporation Finance

100 F Street N.E.

Washington, D.C. 20549

    Re:

    Form 10-K for Fiscal Year Ended December 31, 2004

    Forms 10-Q for Fiscal Quarters Ended March 31, 2005, June 30, 2005 and

    September 30, 2005

    Form 8-K filed November 11, 2005

    File No. 000-28274

Dear Ms. Collins:

Reproduced below are the comments of the Division of Corporation Finance of the United States
Securities and Exchange Commission (“SEC”) in its letter dated November 30, 2005, and the
supplemental response of Sykes Enterprises, Incorporated (“Sykes”, “We”, or the “Company”) to each
comment.

    1.

    Clarify for us the three deliverable elements in the material arrangement with the
major consumer products company referred to in the Company’s response to our prior comment
no. 1.

    We have identified the following three deliverable elements in the contract:

    Contact Center Services. Includes processing of inbound product information
requests, providing description of product features and handling of customer account
inquires and related matters.

    Fulfillment Services. Includes managing our Client’s vendor relationship related to
sales order processing, payment processing, inventory control, product delivery and product
returns handling.

SYKES Enterprises, Incorporated n 400 N. Ashley Drive n  Tampa, FL, USA 33602 n www.sykes.com  n Fax: 813-273-0148 n  813-274-1000

Infrastucture Services (including Application Support and Managed Services).
Includes monitoring and supporting the IT and telecommunications infrastructure and
providing application services such as maintenance, enhancement, development, compliance
changes and testing of the customer contact tracking system used in providing Contact
Center Services and Fulfillment Services.

Explain why the identification of the deliverable elements required “significant judgment
and complex estimation.” Clarify for us how the Company determined that the fair value of
each element. Cite the specific authoritative literature applied by the Company in your
response. We may have further comments.

The identification of the three deliverables elements mentioned above required evaluation
of the contract terms to determine the extent that each delivered item met the conditions
to be treated as a separate unit for accounting purposes. The phrase “significant judgment
and complex estimation” included in our initial response was intended to refer to the
thorough evaluation of the contract. This phrase was not intended to imply that the
accounting was so complex as to affect the Company’s ability to identify the deliverable
elements or determine the fair value of those elements. Using guidance in applicable
accounting standards, including SEC Staff Accounting Bulletin (“SAB”) No. 101 (SAB 101),
“Revenue Recognition in Financial Statements", SAB 104, “Revenue Recognition", and the
Emerging Issues Task Force (“EITF”) No. 00-21 (EITF 00-21), “Revenue Arrangements with
Multiple Deliverables", the Company determined that the three identified deliverable
elements were considered separate units for revenue recognition purposes because all of the
following conditions were met (EITF 00-21, par. 9):

    a)

    The deliverable items each have value to the Client on
a standalone basis since each of these services can be and are sold
separately by any vendor, including the Company.

    b)

    There is objective and reliable evidence of the fair
value of the undelivered items relating to the Contact Center Services and
the Fulfillment Services. The amounts allocated to these services are
based upon the price offered separately for each of these deliverable
elements by the Company for similar services to other unrelated clients.
However, there is no such objective and reliable evidence of fair value
for the Infrastructure Services, so the Company used the residual method
of accounting (as defined in EITF 00-21, par. 12) to determine the amount
of the total contractual fee to allocate to these services. Under this
method, the total contractual consideration is allocated first to the
undelivered elements, based on their known fair values, with the remainder

2

SYKES Enterprises, Incorporated
n 400 N. Ashley Drive
n
 Tampa, FL, USA 33602
n www.sykes.com  n Fax: 813-273-0148
n  813-274-1000

    being allocated to the Infrastructure Services. Once we determined the
allocation of revenue between deliverable elements, based on the fair
value of those deliverables, there were no further changes in the revenue
allocation.

    c)

    There is no general right of return for the
deliverable elements, which primarily represent services provided by the
Company as outlined in the contract. Therefore, the delivered elements are
considered on a separate basis for accounting purposes.

Tell us how the Company determined the fee for each element was fixed and determinable.

The portion of the fees for each element not subject to change is considered to be fixed
and determinable. This means there are no penalty or bonus clauses, customer rights of
return or cancellation clauses that can change the amount of the fee.

The portion of the fees for each element that are subject to change due to potential
penalties as a result of the failure to meet certain minimum service level requirements is
not considered to be fixed and determinable and is deferred until the time that it becomes
fixed and determinable. The contractual service level requirements specify the performance
standard and service quality levels which include the percentage of telephone calls
answered, the average speed of answer, the quality of telephone contact handling, the
availability of the system, the average speed to resolve system problems and critical
deliverables. Failure to achieve these service level requirements can result in penalties
to the Company. If all service level metric information is available, penalties, if any,
are calculated for any service level shortfalls based on the specific quantifiable
contractual terms and deducted from revenue recognized for the period. We invoice the
Client the amount of revenue, net of the known, quantifiable penalties. In the unusual
circumstances where the applicable service level metric information is not known and
quantifiable at the time the invoice is prepared, we defer the maximum at risk revenue
related to these services, as calculated in accordance with discrete contract terms, in
accordance with Statement of Financial Accounting Standards No. 48, “Revenue Recognition
When Right of Return Exists” until the result of the service level metric information
subsequently becomes known.

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SYKES Enterprises, Incorporated n 400 N. Ashley Drive n  Tampa, FL, USA 33602 n www.sykes.com  n Fax: 813-273-0148 n  813-274-1000

    2.

    Clarify for us, the fact and circumstances underlying the Company’s decision to
restate deferred revenues for the years ended December 31, 2003 and December 31, 2004, or
the quarters ended March 31, 2005 and June 30, 2005. Tell us how you determined that this
restatement will have no impact on revenues, given the significance of the amounts
reclassified to current liabilities at each balance sheet date (i.e. given that $19
million was reclassified to current liabilities at December 31, 2003, the Staff would
assume that this reclassification would result in additional revenues of $19 million
during the fiscal year ending December 31, 2004). We may have further comments.

    During the review of the Form 10-Q for the third quarter 2005, the Company identified a
potential error in the classification of deferred revenue with regard to the Sykes Canada
Roadside Assistance programs, which should have been classified as current liabilities on
the Company’s Consolidated Balance Sheets. As a result, the Company performed a review of
its major contracts for the Roadside Assistance programs and determined that the deferred
revenue associated with these programs should be classified as a current liability in the
Company’s consolidated balance sheets. Historically, the Company has properly recognized
revenue from these services in the period the services are performed, but the
classification of the deferred revenue in the balance sheet has historically been
incorrect.

    The basis for this determination involved two primary factors. First, several of the
Roadside Assistance contracts provide for the payment of up-front fees for services to be
performed during the next ensuing twelve month period. Second, those contracts that
provide for the payment of up-front fees for multiple years of service contain cancellation
and refund provisions whereby the manufacturers or customers can terminate the contracts
and demand pro-rata refunds of the up-front fees with short notice. The Company has
determined that the up-front fees associated with services to be provided over the next
ensuing twelve month period should be classified as current in accordance with Accounting
Research Bulletin, “ARB” No. 43, “Restatement and Revision of Accounting Research
Bulletins”.

    Similarly, the Company has determined that up-front fees received in connection with
contracts that contain pro-rata refund provisions should also be classified as current
since such contract provisions represent a current call on cash. Given the materiality of
the balances, the reclassification of deferred revenues to current liabilities is
considered a correction of an error to prior periods in accordance
with APB 20, “Accounting
Changes”.

4

SYKES Enterprises, Incorporated
n 400 N. Ashley Drive
n
 Tampa, FL, USA 33602
n www.sykes.com

n Fax: 813-273-0148
n  813-274-1000

    Since the corrections to the consolidated balance sheets for the reclassification of
deferred revenues were determined to be material to the consolidated financial statements,
on November 23, 2005, the Company filed its Form 10-Q for the quarter ended September 30,
2005 reflecting the restatement of deferred revenues as of December 31, 2004 and will file
an amended Form 10-K for the year ended December 31, 2004 and amended Form 10-Q’s for the
quarters ended March 31, 2005 and June 30, 2005. The decision to restate the previously
issued financial statements has been discussed with the Company’s independent registered
public accounting firm.

    3.

    Clarify for us, when the Company intends to file the restated financial statements.
Please note that we may have further comments after you file the restated financial
statements. In addition, we remind you that when you file the restated documents, you
should appropriately address the following:

    •

    An explanatory paragraph in the reissued audit opinion,

    •

    Full compliance with APB 20, paragraphs 36 and 37

    •

    Fully update all affected portions of the document, including MD&A,

    •

    Selected financial data and quarterly financial data,

    •

    Updated certifications

    •

    Updated Item 9A disclosures should include the following:

    •

    A discussion of the restatement and the facts and circumstances surrounding
it,

    •

    How the restatement impacted the CEO and CFO’s original conclusions
regarding the effectiveness of their disclosure controls and procedures,

    •

    Changes to internal controls over financial reporting, and

    •

    Anticipated changes to disclosure controls and procedures and/or internal
controls over financial reporting to prevent future misstatements of a similar
nature.

    The Company intends to file the restated consolidated financial statements, to incorporate
the items you mentioned in comment 3 above, as of December 31, 2003 and December 31, 2004,
and as of the quarters ended March 31, 2005 and June 30, 2005 as soon as practicable. The
restated consolidated financial statements will include an explanatory statement
to describe that on November 11, 2005, the Company determined that certain deferred
revenues should be classified as current liabilities rather than long-term liabilities in
the Company’s Consolidated Balance Sheets. The explanatory statements, revised Item 9 of
Part II of the Form 10-K/A, revised Item 4 of Part II of Forms 10-Q/A and the related
restatement note 2 of the consolidated financial statements are attached for your review.

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SYKES Enterprises, Incorporated n 400 N. Ashley Drive n  Tampa, FL, USA 33602 n www.sykes.com  n Fax: 813-273-0148 n  813-274-1000

Should you have any questions about the responses above, please feel free to contact me at
813-274-1000.

    Sincerely,

Sykes Enterprises, Incorporated

    By:
    /s/ W. Michael Kipphut

    W. Michael Kipphut

    Senior Vice President and

Chief Financial Officer

cc: Megan Akst, Staff Accountant, U.S. Securities and Exchange Commission

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SYKES Enterprises, Incorporated n 400 N. Ashley Drive n  Tampa, FL, USA 33602 n www.sykes.com  n Fax: 813-273-0148 n  813-274-1000

EXPLANATORY STATEMENT

     On November 11, 2005, Sykes Enterprises, Incorporated (the “Company”) determined that certain
deferred revenues should be classified as current liabilities rather than long-term liabilities in
the Company’s Consolidated Balance Sheets as of December 31, 2003 and thereafter. The deferred
revenues relate to various contracts in the Company’s Canadian roadside assistance program for
which the Company is prepaid for roadside assistance services that are generally carried out over a
twelve-month or longer period. Accordingly, previously issued consolidated financial statements for
the years ended December 31, 2003 and thereafter have been restated to correct the classification
of deferred revenue and the related deferred income taxes.

     This Amendment No. 1 on Form 10-K/A which amends and restates the Company’s Form 10-K for the
year ended December 31, 2004, initially filed with Securities and Exchange Commission (the “SEC”)
on March 23, 2005 (the “Original Filing”), is being filed to reflect the restatement of the
consolidated financial statements and other financial information of the Company for the years
ended December 31, 2004 and 2003. The Company reclassified $19.0 million and $19.0 million of
“deferred revenue” from long-term liabilities to current liabilities as of December 31, 2004 and
2003, respectively. Additionally, the Company reclassified $3.9 million and $4.5 million of
deferred revenue from “other accrued expenses and current liabilities” to “deferred revenue” in
current liabilities as of December 31, 2004 and 2003, respectively. Finally, the Company
reclassified $2.1 million and $1.6 million of the related “deferred income taxes’ from long-term
assets to current assets as of December 31, 2004 and 2003, respectively. See Note 2 to the
consolidated financial statements for further details.

     For the convenience of the reader, this Form 10-K/A sets forth the Original Filing in its
entirety. This Form 10-K/A includes such restated consolidated financial statements and related
notes thereto for the years ended December 31, 2004, 2003 and 2002 and other information related to
such restated consolidated financial statements, including revisions to Item 6 of Part II, Selected
Financial Data, Item 9A of Part II, Controls and Procedures, and Item 15 of Part IV, Exhibits and
Financial Statement Schedule. Except for these revisions, no other information included in the
original report on Form 10-K is amended by this Form 10-K/A. The foregoing items have not been
updated to reflect other events occurring after the Original Filing or to modify or update those
disclosures affected by subsequent events. Pursuant to the rules of the SEC, Item 15 of Part IV of
the Original Filing has been amended to include an updated report and consent of the Company’s
independent registered public accounting firm and cer