Please stop paying, you are costing me my job.
[ Follow Ups ] [ Post Followup ] [ Credit Forum Index ]
Posted by x-providian worker
(68.47.54.64) on January 21, 2004 at 21:18:16:
Providian Financial Corp. closed its collections operation in Louisville yesterday, putting about 315 people out of work, as its improving fortunes reduced the need for bill collectors. The closing marks the end of a Louisville presence for Providian, which was spun off as a banking/financial-services company in 1997 when Providian Corp. — formerly Capital Holding — sold its insurance operations to Aegon, the Dutch insurance giant, which still maintains a Louisville office. Providian Financial's Louisville call center, at 1600 Ormsby Station Court in eastern Jefferson County, specialized in collecting past-due accounts. That work is being consolidated at Providian's two other collections sites in Austin and El Paso, Texas, which employ about 930 people. "This was a difficult decision," said Tom Warburton, executive vice president of collections for the credit-card provider based in San Francisco. "Business has been improving the past two years," company spokesman Alan Elias said. "We sold off some of our higher-risk accounts, and the new accounts are of better credit quality." The Louisville workers, who earned $10.50 an hour and up, were told of the closing yesterday and given a severance package, Elias said. "Everybody was shocked, that's for sure," one employee said. "Yesterday we had a job, today we don't. But it's not a total surprise." The employee, who declined to be identified for fear that benefits might be lost because of a confidentiality pact, added, "The company has been good to us. But anytime you lose a job, it's not good." Metro Mayor Jerry Abramson said he was "sorry to hear about Providian's announcement. Unfortunately, we're in the midst of an economic realignment that is costing jobs in communities across the country. We will reach out to help affected employees with job-placement assistance — and with other needs, such as retraining — in the hopes that we can keep these families in our community." Providian Financial grew rapidly in the late 1990s by catering to high-risk consumers with spotty credit. But the company sustained heavy losses when the economy soured and consumers defaulted, sparking some speculation that the company might go bankrupt. Its financial troubles led to a management shakeup in late 2001. Louisville investor J. David Grissom, a company director since the 1997 spinoff, was named interim chairman and served nearly seven months. Grissom, whose term as director expires this year, did not return a call seeking comment yesterday. In its battle for survival, Providian has spent the past couple of years restructuring, strengthening its balance sheet and trimming its work force of 13,500 by about two-thirds. With the latest loss of the Louisville jobs, Providian employs about 4,200. The downsizing cut deeply into the Louisville operation, which had about 900 employees at the start of 2002. Last month, 37 people lost their jobs, reducing the staff to fewer than 320. With the shutdown of the office, Elias said, affected employees were given an extra 60 days' pay, medical benefits through the end of March, job-placement services and other compensation, such as money for unused vacation time. In addition, Providian will sponsor a job fair Feb. 12 with local employers. A handful of workers are being offered a chance to relocate to Texas. Elias said the company's lease on the Louisville property — about 90,000 square feet in two buildings — expires in about a year, and "we're already working to sublease the space." Providian late Monday reported that its profits for the last three months of 2003 exceeded analysts' expectations by a wide margin, as it moved away from targeting high-risk consumers. And it predicted that earnings for 2004 might top last year's by more than 30 percent. "We are very well positioned for the year ahead," said Joseph Saunders, chairman and chief executive. "We are seeing positive financial trends in all areas of our business, including credit, operations and marketing. We expect a continuation of these positive trends in 2004, highlighted by lower net credit losses, lower operating expenses and additional investment in our marketing initiatives." Providian said it expects to report fiscal 2004 earnings of about 90 cents per share, an increase of about 34 percent from 2003 net income of 67 cents a share. Analysts project about 91 cents a share for 2004. A 51 percent decline in net credit losses and an 18 percent drop in noninterest expenses boosted results for the fourth quarter of 2003. Overall, Providian earned $67.1 million for the quarter, or 23 cents per share, compared with $12.1 million, or 4 cents per share, a year earlier. On average, Wall Street analysts surveyed by Thomson First Call had estimated earnings of 17 cents a share. For the year, Providian's profits fell 10 percent to $196.2 million, but met the company's goal of exceeding its 2002 earnings before a one-time tax benefit of $30 million. Analysts for Raymond James yesterday upgraded Providian shares to market perform from underperform. "Credit quality and balance-sheet quality continue to improve, and we no longer see reason for these shares to weaken from current levels," analyst Michael Vinciquerra said. On the New York Stock Exchange yesterday, Providian shares rose 4 cents to $12.02
Follow Ups:
Post a Followup
|