In the first mass layoff announced by a major North Carolina employer this year, American Express plans to close a customer service center in Greensboro and eliminate about 1,500 jobs.
The news deals a fresh blow to an already shaky region of the state and signals that companies continue to look for ways to cut costs despite a slowly reviving economy.
"This is all too typical of this recovery," said Mark Vitner, a senior economist with Wells Fargo Securities in Charlotte. "Job growth is severely lagging, and many businesses are still struggling to bring costs in line with slower revenue growth."
AmEx announced Wednesday that work handled from the Greensboro center will be shifted to other locations in the United States by the end of 2011.
Of the center's 1,900 employees, AmEx plans to keep about 400 who will work from home. Some of the others will be offered the chance to relocate to service centers in Ft. Lauderdale, Fla., Phoenix and Salt Lake City.
The Greensboro center, which opened in 1985, is about 95 miles west of Raleigh. It employed as many as 3,800 people at its peak in the early 1990s, but now has about one out of three seats empty, said executive vice president Jim Bush.
As customers shift to electronic bill paying and online customer service, the volume of calls the center handles has dropped. The center also handled collections, which are down. The company's other service centers can handle a wider range of support work.
"This decision was not about performance," Bush said. "It's a function of excess real estate. We need to invest in growth and not empty seats."
Greensboro workers who are let go will be offered severance based on tenure, a bonus of 16 weeks' pay, up to $10,000 in tuition reimbursement during the next two years, outplacement help and other assistance, said Robert Garinger, the center's general manager.
AmEx officials declined to comment on average salaries at the center, but noted that a wide range of jobs will be eliminated.
Jobless rate 10.5%
Those thrown out of work won't have an easy time. The unemployment rate for the Greensboro-High Point area rose to 10.5 percent in November, above the state rate of 9.7 percent. The region is still trying to move away from its traditional concentration of textile, furniture and tobacco jobs.
Gov. Bev Perdue said she is setting up a "rapid response team" with officials from the N.C. Employment Security Commission, Commerce Department and community college system to work with AmEx employees who need help.
"Unless current employers expand, or new employers move in, these laid-off workers will struggle," said Greg Lilly, an associate professor of economics at Elon University.
"On the bright side, AmEx said that some of these workers may be able to keep their jobs by being willing to work from home," he added. "Being able to work from home may be better - from many perspectives - than working at the call center."
The layoffs will cause deeper pain in the Triad, including significant spending declines at restaurants, retailers and other area businesses, Lilly said.
Giving will taper
AmEx will continue its philanthropic support in the Greensboro area at current levels for a couple more years, but then start cutting back on its giving, Bush said.
Closing the customer center also means that AmEx will vacate a 403,000, square-foot facility at a time when few employers are hunting for office space. AmEx is reviewing its options for subleasing the center, Bush said.
"Our focus now is on our people and helping them through this transition," he added.
The restructuring will happen in phases - starting in about 90 days and finishing by Dec. 31. "We want to let people take time to absorb this and decide what's right for their families," Bush said.
AmEx isn't abandoning Greensboro completely. The company is building a $400 million data center nearby that's expected to employ about 100 people. Some of the call center's workers will be able to apply, but most of the new jobs will require more technical skills, Bush said.
