Recent Capital One Debt Consolidation Layoffs Due to Defaults and Technology
The US manufacturing industry isn’t alone in experiencing massive restructuring. The latest round of job cuts and reorganization has Capital One’s Debt Consolidation & Credit Card Unit. front and center. Capital One is one of the largest finance organizations in the US, employing over 20,000 workers across the country. Employees in Richmond, Virginia and Rolling Meadows, Illinois were affected.
Capital One Cutbacks: What Happened?
Credit Card Debt Consolidation and Auto Loan Defaults
Many of the employees affected by the layoffs worked in the credit card, auto financing, and customer service divisions. Defaults on credit card and auto loans have contributed to the need for restructuring, as the company is forced to cut costs to keep their bottom line numbers in tact.
Restructuring is an almost sure fire sign that layoffs are in the making, and that’s exactly what happened with Capital One. Earlier this year, the company announced that it would be restructuring in the near future.
Technology Slowly Replaces Human Workers at Capital One
Another factor that played an interesting role in the layoffs is technology. Capital One debt consolidation’s integrated customer support technology via their app and the website make it very easy to pay bills, consolidate debts or perform a number of features, all without having to speak with a representative.
While older customers still rely on human interaction to solve most issues that arise with their finance accounts, the company’s younger customer base is less likely to pick up the phone to speak with someone about their balance. They would much rather prefer to do that online, as it is faster and more convenient.
According to Sie Soheili, a company spokesperson, more and more customers are starting to self-service using their integrated digital tools, as opposed to waiting to get help from a customer service agent. If this trend continues, there will most certainly be more cuts to follow as growth occurs and customer service interactions decline. Nearly 400 call center jobs were cut at the Rolling Meadows, Illinois site. Employees were offered a severance package and some were encouraged to apply for other open positions with the company.
Capital One Layoffs: How it’s Affected Richmond Virginia
The Richmond Virginia layoffs hit the company hard, as this site is the one of Capital One’s debt consolidation nerve centers. It houses over 10,000 workers and represents a little over 20 percent of its workforce in the United States.
Capital One did not state how many employees were affected by this round of layoffs and restructuring in Virginia, but it was not enough to warrant public notice in Richmond.
Layoff at Capital One: Bottom Line
With their increased self-service technology, it’s highly likely that this isn’t the last round of cutbacks you’ll hear of from Capital One. The company is steadily growing, but the customer base is rapidly changing to include primarily tech savvy millennials.
Increased tech paired with loan defaults means that restructuring and cost savings are always at the forefront for Capital One. The next round of cuts may come sooner than you think. Stay tuned.