NEW YORK Nov 15 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
"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)