U.S. payment processor First Data cuts 1,700 jobs
NEW YORK Nov 15 (Reuters) - First Data Corp, the credit and debit card payment processor, said it is eliminating 1,700 jobs, less than two months after private equity firm Kohlberg Kravis Roberts & Co [KKR.UL] acquired it for $26 billion.
The layoffs amount to about 6 percent of First Data's workforce, spokeswoman Nancy Etheredge said. Workers were notified Thursday of the cuts, some of which took effect the same day, and which will be largely completed by year end, she said.
"We are in a very competitive market, and to grow our business globally, we need to continually seek better and faster ways to deliver new products and services," Etheredge said. First Data will end this year with about 29,000 employees, about the same as at the end of 2006, she said.
On Wednesday, Greenwood Village, Colorado-based First Data said third-quarter profit from continuing operations fell 73 percent from a year earlier to $35.1 million, though results included $208 million of costs related to the KKR acquisition. Revenue increased 16 percent to $2.07 billion.
The acquisition came after First Data faced slowing growth following its spinoff last year of Western Union Co (WU.N), the world's largest money transfer company. First Data installed Michael Capellas, the former chief of MCI Inc and president of Hewlett-Packard Co (HPQ.N), as chief executive.
Private equity firms often cut jobs from the companies they acquire, in a bid to increase profits and cash flow. Boosting cash flow lets the private equity firms pay off their own lenders, and can make the companies more valuable when the firms sell them, typically in two to four years. (Reporting by Jonathan Stempel; Additional reporting by Michael Flaherty; Editing by Leslie Gevirtz)
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