Capital One Layoffs 2017 Continue with Job Cuts at Virginia and Illinois Offices
Famous American credit card company Capital One Financial Corp. (NYSE:COF) is continuing to cut jobs from its credit card divisions across the country. The McLean, Virginia-based company’s Richmond location is the latest victim of Capital One layoffs in 2017. Earlier this year, mass layoffs also hit Capital One’s Rolling Meadows, Illinois offices.
The layoffs may appear odd at a time when the company is reporting record-high credit card sales, and when Americans are continuing to rack up credit card debt. But delving a little deeper helps reveal the problem.
Capital One Layoffs 2017 in Richmond
Capital One has just laid off an as-of-yet undisclosed number of employees at its Richmond, Virginia location. This round of job cuts also affected Capital One’s U.S. credit card business division across the country. The Richmond layoffs are particularly significant because the city is one of the company’s big operational hubs, where it employs over 11,000 workers—which accounts for about 22% of its U.S. workforce.
According to management, the layoffs in Richmond are a part of restructuring initiative to allow the company to cut costs and become leaner and more efficient.
Despite achieving high sales, the bitter reality is that the lending company has recently been facing a rise in defaults. Both credit card and auto loan delinquencies have been increasing at Capital One in the past few months.
Bad debt hurts the top line numbers, forcing lenders to cut costs elsewhere to save their bottom line numbers from slipping. When companies start talking about “restructuring,” job cuts usually follow.
Capital One Layoffs 2017 in Rolling Meadows
Capital One’s restructuring process has been going on prior to the Richmond layoffs. In August, Capital One initiated mass job cuts in Rolling Meadows, Illinois.
About 400 employees were laid off at Capital One’s call centers in the company’s credit card division—again, in a restructuring move meant to shift the company’s focus toward improving digital services.
The job cuts in Rolling Meadows affected employees who provided telephone customer service to credit card holders—a job that is increasingly becoming redundant with the rise of newer technologies.
Tech Drives the Changes to Capital One Customer Service
Technologically challenged elderly Americans may still seek a human assistant’s help with their credit card issues, but, for most tech-savvy millennials, the need for a live customer service agent on the phone is shrinking. Today’s more technologically advanced generation is more comfortable finding answers to their problems online instead of having to waste time waiting for a human assistant on a telephone line.
Capital One’s customer service is more digitized today than ever before. Following the Rolling Meadows layoffs, Capital One spokesperson Sie Soheili said, “Even while our business has continued to grow, call volumes continue to decrease as customers increasingly self-service through a mix of our digital tools and contact center calls.”
With the company continuing to invest further in technology, the likelihood of further layoffs appears to be a virtual certainty. As the lender continues to face downward pressure on revenue from delinquent loans, its restructuring effort will likely continue for quite some time.
America’s household credit card debt has now soared to the lofty levels that were seen during the Great Recession. Meanwhile, the Federal Reserve reports that credit card delinquencies are beginning to rise—a trend that doesn’t bode well for credit card companies such as Capital One.
With all this in mind, the layoffs at Capital One in 2017 may not be over just yet.
“Capital One restructures its card division, leading to job cuts here,” Richmond Times-Dispatch, September 28, 2017.
“Capital One eliminates 400 call center jobs from Rolling Meadows office,” Chicago Tribune, August 10, 2017.