The local impact of layoffs tied to a newly announced cost-cutting plan at First Data Corp. will be minimal and Omaha could benefit as the company begins closing smaller facilities in the U.S. and abroad.
The plan, which will include “a few thousand” layoffs, is expected to take shape in the coming months and was announced along with improved quarterly earnings Monday.
“First Data expects that the overall employee population in Omaha will remain consistent over time, if not grow, as a result of the closing of some of its smaller offices around the country,” company spokesman Josh King said.
Omaha remains a focal point for investment in both human resources and infrastructure, King said.
First Data employs about 5,000 people in multiple facilities across Omaha and has 23,000 employees in facilities around the world.
Himanshu Patel, executive vice president in charge of strategy, planning and business development for the payments processing and technology company, said the “head-count reduction” would take place across the organization’s global footprint.
“Our intention is that these are fundamental, sustainable cost cuts. These are hard decisions,” Patel said during a conference call. “None of them are quick and easy.”
In addition to layoffs, part of the initiative includes “offshoring” of jobs, Patel said.
That approach is predicted to save the company $200 million a year by mid-2016.
Despite the year-over-year improvement, the company was unable to pull off a second-straight quarterly profit.
No matter, said company officials, who pointed to stronger revenue and significant improvements to the balance sheet compared with the year-ago quarter.
Total revenue increased 2 percent, to $2.7 billion, from first quarter 2014. The quarterly net loss of $112 million is a 44 percent improvement over a year-ago net loss of $201 million.
“Our first quarter reflected good business momentum and validated our strategy,” said Frank Bisignano, chairman and CEO of First Data.
“We continue to invest aggressively in key areas of our business such as distribution and new products, and are beginning to see the revenue growth associated with those investments,” he said.
Kohlberg Kravis Roberts & Co., the private equity parent company of First Data, reported April 23 that its investment in the organization increased in value for the second-straight quarter.
During the fourth quarter of 2014, First Data turned its first profit since 2007. Officials attributed the net loss in the most recent quarter to the cyclical nature of the business.
On any given day, First Data processes more than 2,000 financial transactions per second.
That volume increases to more than 10,000 per second during the peak holiday shopping season, the effect of which is apparent in the fourth-quarter financial report.
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