Embattled Alliance Data to Layoff 480 in Texas

Credit card issuer and processor Alliance Data Systems notified regulators in Texas that it would be closing two call centers in Texas and laying off 480 employees. The cuts will be made in March and April.

Alliance (NYSE: ADS), which is headquartered in Dallas, notified the Texas Workforce Commission last week to register the closure in Dallas call center. Alliance is also closing a call center in Jacksonville, Texas -- about 125 southeast of Dallas -- eliminating 230 jobs.

Spokesperson Shelley Whiddon blamed staffing issues and high employee turnover as the main factor in the decision to close the Jacksonville office. Whiddon said that Jacksonville employees will have the opportunity to transfer to nearby call centers. The call center in Dallas handled customer care calls in support of Alliance's utility services.

It’s the latest in a run of bad news for the company since a $6.8 billion takeover by a private equity firm The Blackstone Group was scuttled late last month (“Blackstone Backs Off from Alliance Data Deal,” Jan. 28).

The company said the timing of the layoffs "is purely coincidental” and not related to the failed takeover bid; employees were notified of the layoffs in December.

Last week, Alliance Data disclosed that Blackstone said it couldn't complete the acquisition because of objections by federal banking regulators. Alliance said Blackstone could satisfy the regulators' concerns, and it sued Blackstone to force completion of the deal (“Profits Drop at Alliance Data as it Sues Blackstone,” Jan. 31).