Capital One to lay off 1,400 workers

updated 9:50 a.m. ET July 22, 2004

MCLEAN, Va. - Capital One Financial Corp. said Wednesday it plans to lay off 1,400 call center workers and outsource their jobs to save money.

The announcement came on the same day the company reported a 42 percent surge in second-quarter earnings, due largely to positive loan growth and a large decline in chargeoffs.

The McLean, Va. credit-card issuer said it will eliminate 30 percent of its call center workers by the spring to save money, outsourcing most of the work to U.S.-based companies.

About 1,100 workers will be laid off in Tampa, Fla., 160 in Dallas and 120 in Richmond.

"Given the intense competition of the card business and our need to continue to offer innovative products, we must accelerate this trend to position ourselves competitively for the future," Catherine West, president of the U.S. credit-card division, wrote in a memo to employeees.

The layoffs are part of Capital One's previously announced efforts to bring costs in line with its top competitors.

Capital One released its earnings after the market closed. Its shares ended the regular session down 31 cents at $66 on the New York Stock Exchange.

Specifically, the company said it earned $407.4 million, or $1.65 per share, for the quarter ended June 30, up from $286.2 million, or $1.23 per share, a year ago.

Capital One also said it expected to earn between $5.60 and $5.90 a share in 2004, up from its previous forecast of between $5.30 and $5.60.

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