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First Data begins layoffs

March 06, 1998

By KERRY LYNN FRALEY

Staff Writer

About 140 of the roughly 2,000 workers at First Data Merchant Services' processing center in Hagerstown received pink slips Thursday as part of the company's 10 percent work force reduction, according to a company spokesman.

Most of the workers were full-time hourly employees, like customer service and information processing workers, said Peter Ziverts, vice president of corporate communication in Englewood, Colo.

Some salaried management positions also were eliminated, Ziverts said.

Almost all of the terminations were effective immediately, he said. How much compensation, including severance pay and job search counseling, employees receive will depend on how long they have been with the company.

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Job eliminations, affecting about 500 workers nationwide, were made at all levels throughout the company, Ziverts said.

Only the company's Sunnyvale, Calif., facility, which employs fewer than 100 people, will be closed, he said.

The cuts are a continuation of a management reorganization begun in October 1997 to make the company more efficient, eliminate any duplicate positions and bring management closer to the customer, Ziverts said.

The company reorganized its senior management positions a month ago and several top-level managers lost their jobs, he said.

Production at the Hagerstown facility shouldn't be affected by the job cuts, Ziverts said.

"It's really a new look at the way we're managing the business," he said.

The reorganization is intended not only to streamline operations but also to improve customer service, which company officials think will help fuel growth at a higher rate, Ziverts said.

The company's 9 percent growth in earnings last year didn't meet the expectations of its Hackensack, N.J.-based parent company, First Data Corp., which had been projecting 15 percent to 20 percent growth to investors, he said.

First Data Merchant Services claims to be the world's leading provider of merchant processing services for credit cards, debit cards and prepaid cards in the retail, hospitality, supermarket, direct mail and health care industries.

Since it opened in Washington County in September 1994, First Data has been the fastest-growing company in the county.

In one year, its work force grew from 500 to 1,400.

Just 14 months ago, the company doubled the size of its processing center on Western Maryland Parkway.

By the end of 1997, it had become the fifth-largest employer in the county, according to Hagerstown-Washington County Economic Development Commission figures.

Despite the layoffs, First Data is likely to remain the county's fifth largest employer based on the economic development commission figures.

Given the strong local economy and the type of business they're coming from, displaced workers should be able to find other jobs quickly, Economic Development Director John C. Howard said.

"The skill levels represented by this type of work force remain in high demand in this region," Howard said.

Staff Writer Lisa Graybeal contributed to this story.

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