Capital One Hands Out 180 Layoff Notices at Its Wilmington, DE, Office

Capital One Bank Layoffs 2018

Capital One Layoffs 2018

Capital One Financial Corp. (NYSE:COF) will be reducing its employee headcount by 180 people at its Wilmington, Delaware office by handing out layoff notices.

There are two reasons for this recent move by the senior management team. The first is that Capital One is selling its brokerage business to E*TRADE Financial Corp (NASDAQ:ETFC). This is a business division that allows clients to purchase bonds and stock investment of their own free will without a financial advisor. As a result, fewer employees are needed to operate the remaining functioning business operations.

The second reason for the job cuts is the quarterly loss of $971.0 million. The loss was a result of a $1.8-billion charge that had to be reported because of deferred tax legislative changes approved by Congress back in December.

Previously, Capital One had the ability to accumulate tax asset credits that could be used to offset future liabilities. With the new tax rules, any gains or losses in revenue must be reported in the current quarterly earnings report.


The job cuts are part of a larger plan to make the business much more efficient. “We continued to tightly manage cost even as we invest to grow and drive our digital transformation, and we continued to carefully manage risk across all our customer and commercial banking businesses,” said Capital One CEO Richard Fairbank.

These job cuts are in line with the company’s future vision. Approximately two years ago in 2016, more than 100 employees were given layoff notices after the elimination of Capital One’s mortgage operations. This also occurred at its offices in Wilmington.

No details were given of when the laid-off employees would receive any severance pay or if they would continue to receive any insurance benefits.

Capital One is a bank holding company, with a focus on offering credit cards products, auto vehicle loans, and banking and savings products. In terms of assets held, Capital One is ranked as the seventh-largest commercial bank in the United States.

E*Trade Purchases Capital One’s Brokerage Business

Even though Capital One sold off its brokerage business to E*Trade, it was not enough to offset the quarterly loss. The sale of the business unit earned Capital One $170.0 million. The deal will result in E*Trade gaining approximately one million client accounts and approximately $18.0 billion in client’s assets.

The sale of the business occurred while fourth-quarter net income fell by 13%. In addition, there was a $58.0-million tax expense incurred because of President Trump’s new tax rules. On the business side of things, because there was a negative return earned year-over-year, it could have resulted in a re-evaluation of the business division and eventually the sale, which has been the case.

It seems that the big beneficiary in the transaction was E*Trade based on the comments made by E*Trade CEO Karl Roessner. He said that the opportunity to buy such a large book of business doesn’t come very often. He also mentioned that the average cost of acquisition per customer was lower than the typical benchmark used. Therefore, the sale was more strategic.

Another reason for the job cuts and sale of the business could be due to Trump’s new tax plan that has come into law. The brokerage business wrote down $58.0 million, which is part of the $1.8-billion total quarterly write-down. The new tax plan regime was supposed to help the economy and create jobs. However, it seems to be doing the opposite, with jobs being cut and large write-downs being incurred.

Conclusion: Capital One Layoffs 2018

Since the company is looking to reduce business operating costs and invest more into its digital avenues, it could result in even more job losses. This is true because a more digital strategy requires fewer employees to complete the same goal as a face-to-face service. Also, with the new tax laws, it could also mean a new business strategy in order to pay as little tax expenses as possible.



Capital One set to lose 180 jobs in Wilmington,” Delaware Online, January 26, 2018.

Layoffs looming at Capital One after sale of brokerage business,” Delaware Online, January 25, 2018.

E*TRADE Acquires 1M Brokerage Accounts From Capital One,” Investopedia, January 26, 2018.

Large Commercial Banks,” Federal Reserve Statistical Release, September 30, 2017.


Categories: Job Cuts, News