Capital One is shutting down its sprawling credit card call center in Tampa, eliminating 1,100 jobs and delivering a serious blow to a decadelong effort to upgrade the area's economic base.
The Tampa job cuts, which were announced along with smaller staff reductions in Dallas and Richmond, Va., are part of Capital One's ongoing push to outsource much of its customer relations work.
Salaries at the Tampa center range from $35,000, with bonuses, to $100,000 for some managers, employees said. They said they were told their jobs would be sent overseas, but the company would not say where the work will be done. About 350 jobs will remain in Tampa.
Workers at the call center's campus were called to an emergency meeting about 3 p.m. to hear the news, hundreds of them sitting in chairs set up in a basketball gymnasium in the company's Renaissance Center in Town 'N Country. Others simultaneously congregated in a large conference center.
Extra security, including police cars outside, underscored the gravity of the moment.
"Although this was a difficult decision, I know that it is the right decision for the U.S. Card business and for Capital One," Catherine West, president of the company's U.S. Card business, wrote in a memo circulated to employees Wednesday afternoon. "It enables us to achieve the cost efficiencies we need to win in our markets."
After a brief discussion, the two large employee groups split into smaller groups to discuss concerns and receive informational packets.
"Then they let us go for the day," said Billy Sickora, 29, an account supervisor and five-year employee. "Aren't they kind?"
Sickora said the news was a shock to most. "We were told just recently that nobody in the site knew until today, not even the site manager."
After a year in which other jobs had been outsourced to contractors and some vacant positions had gone unfilled, some employees said they were expecting a round of layoffs. But they did not anticipate a shutdown of the entire Tampa credit card operation.
The McClean, Va., company plans to sell its five-building complex in Tampa. The 71-acre site includes a jogging trail, gym, laundry service and cybercafe. It intends to lease back an undetermined amount of space to house the 350 workers who will remain to handle auto finance collections.
In a statement, Capital One said most of the jobs will be outsourced to "U.S.-based companies." Spokeswoman Tatiana Stead would not directly address whether those U.S. companies, in turn, would send the work offshore, a practice that has emerged as a major political issue.
Stead said the company began aggressively outsourcing in 2001 and now has an "extended work force" of 11,000 employees. Of those, she said, more than 80 percent are in the United States.
Yet, several soon-to-be ex-employees said Wednesday they have no doubt their jobs are headed outside the United States.
"They told us that our work is being outsourced to another country, and that is the main thing everybody is upset about," said Patricia Correa, 59, who worked as an account supervisor.
"Everybody in Tampa helped build that company. . . . It was a financial decision, they told us, because they can pay people in India way less."
Several employees said Capital One established a precedent of using foreign workers within the past year when jobs in the Spanish- speaking department in Tampa were shipped to Costa Rica.
"It's unfortunate that they feel like outsourcing is the answer," said Daniela Demorais, 23, a Capital One account supervisor who lives in St. Petersburg. "I don't think they'll get the quality . . . that they want."
One of the largest providers of Visa and MasterCard credit cards in the world, Capital One swept into Tampa in 1995, starting with about 150 employees. It rapidly added buildings and employees to its Town 'N Country campus near Waters Avenue and the Veterans Expressway.
Prospective employees were courted through advertising on billboards and the Yellow Pages.
Capitol One had been courted, too, at taxpayer expense. In 1996, the company was approved for a $4-million tax refund - about $1- million to come from local governments - to be paid out over time through the Qualified Target Industry Program. QTI, as it is sometimes called, is a state incentive plan that uses public money to attract companies with high-paying jobs. Capitol One had to agree to bring 1,000 jobs.
According to state records, Capital One was paid $2.7-million from the program through 2003.
"The state is obviously disappointed to lose any company, but the tide is going in our direction," said Jacob DiPietri, a spokesman for Gov. Jeb Bush. "The state has led the nation in job growth for more than two years, because of our favorable business climate, which includes programs like the QTI program."
Stead, the Capital One spokeswoman, said Wednesday that her company has received incentives only when it has met the required benchmarks.
Hillsborough County Commissioner Jan Platt, who consistently votes against incentive programs for industry, said Wednesday's announcement is the reason why.
"There's no guarantee that the companies will stay," Platt said. "Do the taxpayers get refunded? I seriously doubt it."
Commissioner Jim Norman, a supporter of corporate incentives, said one failure doesn't take away from a successful program.
Norman said studies have shown that Central Florida fared well compared to other parts of the nation after Sept. 11 because it has a diverse economy created in part by such programs.
"We were one of the least-impacted communities in America because of our diverse economy and these programs," he said. "I'm proud of our investment in these jobs. I wouldn't throw the program out because of that failure.
Capital One's departure probably will not only mean a substantial loss of jobs but local sponsorships and charitable donations.
Its projects included the Capital One Leadership Grants program, which it launched in 2000 with a $400,000 investment and a commitment to share technology and volunteers; and $250,000 in contributions to area food banks from 1998 to 2001.
The credit card operation will be shuttered in phases, with affected workers receiving 90-day notices. That means some will leave as soon as October while others may stay until spring 2005.
According to an information packet given to workers, the layoff package includes one week's pay for every $10,000 in annual salary and extra pay for older workers. Total severance is capped at 12 weeks.
Capital One said it took a charge of $56-million in its second quarter to account for layoff costs.
The company is not finished with layoffs. Chief financial officer Gary Perlin said Capital One expects to take additional charges of $60-million to $100-million during the second half of 2004, much of it related to outsourcing call centers.
Even with these added costs, Capital One beat analysts' earnings expectations for the second quarter. The company said it earned $1.65 per share, up from $1.23 the prior year and above forecasts of $1.50 per share.
- Times staff writers Scott Barancik, Sydney Freedberg, Steve Bousquet and Bill Varian contributed to this report.
CAPITAL ONE'S TAMPA OPERATION
How many employees are affected by Wednesday's announcement?
About 1,100 in the company's credit card call center in Tampa will lose their jobs. Another 350 employees will remain, primarily jobs in a unit that handles customer relations and collections for auto financing.
When will the credit card operation close?
Jobs will be cut in phases with some employees leaving in 90 days and others staying until spring 2005.
How does this fit in with the company's strategic plan?
Capital One has been increasingly outsourcing its customer service, counting about 11,000 workers at other companies as an "extended work team."
Will the jobs end up at call centers outside the United States?
Capital One is not saying directly, though some employees Wednesday said they were told some jobs will be handled outside the country.
IncrediMail - Email has finally evolved - Click Here
