Chase Cuts 140 From Local Credit Card Unit
Wed, Oct 08, 2008
Workers in Wilmington and Newark were given 60-day notice of the layoffs this morning, and have been offered severance packages and outplacement services, according to Paul Hartwick, a company spokesman.
He said affected departments include marketing, operations, human resources,
technology, finance and risk management.
After these layoffs, Chase will have about 6,000 workers remaining in Delaware, mostly in credit cards, but also in other units such as investment banking, wealth management, private banking and corporate technology. Layoffs were all in the card services business, and included another 160 workers at locations outside Delaware.
The downsizing amounts to a little more than 1 percent of Chase Card Services total work force of about 20,000, and was done to cut costs in the face of rising debt defaults within the industry. Affected departments include marketing, technology, human resources, financing and operations.
“They’re across all functions within the credit card business,” Hartwick said. “It’s extremely difficult to make a decision like this, but with the challenging economic environment, we’ve been prompted to take a more prudent approach to how we do business.”
Past consolidations in the banking industry have brought layoffs here and across the nation, and JPMorgan Chase & Co. has been an opportunistic player in Wall Street’s turmoil.
In March, the bank bought out troubled investment bank Bear Stearns & Co. Last month, it bought the assets, deposits and branches of Washington Mutual Inc. for $1.9 billion after it was seized by the Federal Deposit Insurance Corp., which then sold the thrift's banking assets to JPMorgan. That collapse marked the nation's biggest bank failure.
The sale made JPMorgan Chase the second-largest bank in the U.S., after Bank of America Corp., which recently bought Merrill Lynch.
The cost cutting comes as profits at New York-based JPMorgan have fallen, dropping 53 percent in the second quarter to $2 billion, or 54 cents a share. Chase Card Services saw
its earnings plunge 67 percent in the quarter, with its charge-off rate jumping to almost 5 percent from 3.62 percent last year.
The division set aside $2.194 billion to cover expected losses, up from $1.331 billion last year.
Source : http://www.delawareonline.com/
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