Capital One Layoffs in November 2017: 950 Job Cuts Hit Plano, TX

istockphoto.com/Heather Shimmin

Employees brace for a major round of Capital One layoffs as the famous lender exits the mortgage origination business for good. The renowned bank holding company Capital One Financial Corp. (NYSE:COF) is wrapping up its mortgage and home equity lending business in Plano, Texas, where hundreds of employees are about to lose their jobs. A Capital One call center in the area is also being closed, adding to the mass Capital One layoffs through November 2017.

Capital One Layoffs Hit Plano as Company Exits Mortgage Business, Closes Call Center

Capital One has dropped a bombshell on its employees in Plano just days before the holidays. Nearly a thousand Capital One employees are set to receive pink slips from the giant lending company in Plano, Texas through this year and the next.

Capital One is bidding farewell to its home mortgages business and also closing a call center in the city. The two moves will altogether kill 950 jobs in the area.

Separately, the mortgage business unit will shed over 900 jobs across the country, including 750 jobs in Plano and another 155 in St. Cloud, Minnesota and Melville, New York. Meanwhile, 200 jobs will be eliminated in Plano following the closure of the call center.

Capital One’s Plano-based operations primarily cover auto financing and mortgage lending. While the auto financing business is faring well, the mortgages unit has been facing a decline. The lender’s decision to exit the mortgage lending comes as mortgage rates remain historically low.

Capital One’s President of Financial Services, Sanjiv Yajnik, said in an email to employees that the company’s mortgage and home equity units have been in a “structurally disadvantaged” position, owing to the “challenging rate environment.”

Likewise, the decision to close the call center was made after seeing significantly low call volume. More and more Capital One customers are turning to digital channels, like the company website and mobile app, for their banking needs instead of placing calls to customer care agents. Because of this trend, the hundreds of call center jobs are becoming redundant.

Latest Capital One Layoffs Follow Two Major Rounds of Layoffs Earlier in 2017

The latest Capital One layoffs are the third string of layoffs to have occurred in 2017. Earlier this year, the McLean, Virginia-based company also cut some jobs in Richmond, VA, where it has a significant presence. Those layoffs affected the company’s credit card business unit. An undisclosed number of employees were affected by the move.

Prior to that, about 400 employees lost their jobs in Capital One layoffs in Rolling Meadows, Illinois. The job cuts primarily affected call center employees and again, low call volumes were to blame. A company spokesperson said at the time that call volumes continued to drop as a growing number of customers turned to self-service solutions provided to them online.

Mortgage Company Layoffs Add to Texas Job Cuts in 2017

Capital One’s decision to exit the mortgage business underscores the industry’s ongoing challenges. Another major mortgage lender also wound up its operations in Texas this year, citing financial pressures.

Ditech Financial LLC permanently shuttered its Irving office as it consolidated its mortgage business across the country. About 437 employees were affected by the Ditech layoffs.

The lender, like Capital One, had been facing dipping revenue. Meanwhile, rising delinquencies had a double-whammy effect on its earnings. The Ditech CEO warned that additional layoffs were expected as the company evaluated the performance of eight other offices in the country, hinting that additional locations were likely to be closed.

All in all, the two mortgage companies have collectively resulted in nearly 1,500 Texas layoffs in a short span of five months.

 

Source

Capital One to cut 950 jobs in Plano with closing of home loan business, call center,” Dallas News, November 8, 2017.

Categories: Job Cuts, NewsArticle

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