First Data’s decision to cut more than 500 jobs from its Denver location has drawn attention to the company and its relationship to the firm Kohlberg Kravis Roberts.
Hundreds of credit unions process transactions on First Data’s credit and debit card platforms, including many which process transactions with payment CUSOs PSCU and The Members Group.
The processor confirmed the job cuts with Denver media on Nov. 21 but made no formal announcement of the move.
A company spokesman told the Denver Post that the cuts were part of “ongoing efforts to increase operating efficiency, reduce excess capacity and remain competitive in the fast-paced payments business.”
Some of the employees from the cut positions will be relocated to other First Data locations but some would lose their jobs, the company spokesman said.
The move comes as the latest in a series of steps the company has taken after being taken private by KKR in a leveraged buyout in 2007.
The most recent of these included a restructuring of the firm’s debt in October of this year, a move which received the approval of at least one ratings agency. The moves have been necessary as the company has continued to lose money ever since 2007, according to documents filed with the Securities and Exchange Commission, even though it was significantly profitable in 2006, the year before the takeover.
The Wall Street Journal on Sunday published a column by Al Lewis, a Denver-area writer who recapped some of the company’s struggles since the 2007 takeover.
“The credit-card transaction company is much like a consumer who ran up too much credit-card debt and may never be able to pay it back,” Lewis wrote at the end of his column.
First Data did not dispute anything in the column but in reaction emphasized the way it said it is moving forward.
“First Data is transforming itself into a more client-focused, efficient and innovation-driven company,” a spokesman told Credit Union Times on Monday. “This evolution includes returning the company to profitability and better leveraging our assets to help our clients grow their businesses. Another part of the evolution will be in how we do business: driving collaboration with our clients, innovating new solutions, and facilitating incubation of new technologies with startup companies.”
The spokesman also pointed to First Data’s recent acquisition of Clover and Perka, a new point-of-sale system and rewards system aimed at the small business market, as well as its recently announced strategic relationship with Oberthur Technologies, a German firm which provides EMV cards as examples of the firm’s progress.