GREENSBORO — No matter your perspective — economic, civic, philanthropic — American Express’ decision Wednesday to close its call center and move 1,500 jobs from Greensboro amounted to a devastating loss.
The company has been a major employer, sponsor and benefactor for more than 25 years, so the sweep of its decision left many in the Triad stunned.
“What a slap. What a tremendous blow — that staggers us,” said G. Donald Jud, professor emeritus at UNCG and a longtime analyst of the local economy.
The announcement that American Express would close its large service center near Piedmont Triad International Airport amounts to the single biggest regional job loss since Sears laid off more than 1,000 workers in 1993.
The call center, which opened in the mid-1980s, had been ranked as the 25th largest employer in the Triad. Most of the workers live in Greensboro or Winston-Salem, the company said.
But more than an employer, American Express is a major community benefactor, donating thousands of dollars and people-hours to causes across the Triad. The company acknowledged that it will scale back that commitment in two years.
“We just hate it,” said Jim Melvin, president of the Joseph M. Bryan Foundation . “American Express has been a great corporate citizen. … We’re just going to have to pick ourselves up from the canvas and keep going.”
If there was any silver lining Wednesday, it was that an estimated 400 of the Greensboro employees would be offered the chance to work from their homes. The rest of the workers will be offered jobs at call centers in Fort Lauderdale, Fla., Phoenix and Salt Lake City.
“Our hope is to retain all,” Jim Bush, the company’s executive vice president of world service, said at a news conference Wednesday. “The practical matter is, it probably won’t happen.”
Perceiving the severity of the community distress, Gov. Bev Perdue will visit Greensboro today to address how to start moving forward.
The company blames the closure on customers’ increased use of its corporate websites and the high cost of leasing the increasingly vacant call center.
Company officials declined to give a salary range for jobs in Greensboro, but American Express customer service positions in other cities range from about $14.50 to $16.50 an hour, with some positions paying bonuses, according to online job advertisements.
Jud said the losses would ripple through the Triad economy, affecting retail and real estate sales and the general consumer economy. “This is a very sad situation of the recession we’ve been going through,” Jud said.
American Express will not change its plans to build two data centers worth about $1 billion in eastern Guilford County, but the data centers will employ only about 100 people with highly technical training.
Local and state officials reacted to the closure of the call center with dismay.
“While I was encouraged to hear company officials say that this decision had nothing to do with North Carolina’s business climate, that doesn’t ease the concerns of employees who are facing uncertain futures,” Perdue said in a news release.
“These people, most of them will be offered jobs, but unfortunately in other locations,” N.C. Commerce Secretary Keith Crisco said.
“We’ll be (in Greensboro today) with a response team, working with the community college, working with local people. … We have a little experience in this, unfortunately,” Crisco said.
He likened the size and impact of the layoffs to Pillowtex, a textile manufacturer that laid off nearly 5,000 workers in 2003.
Mayor Bill Knight said he can appreciate the corporate decision that was made.
“American Express has been and will continue to be a good corporate citizen. They aren’t completely leaving,” Knight said, referring to the new data centers.
Robert Garinger, senior vice president and American Express’ general manager of the Greensboro center, said if more than 400 try the work-at-home option, the number of local jobs lost could be less. “We will take as many people who can do the home-based servicing work as we can.”
Those who choose not to move will get severance packages that include a bonus of 16 weeks pay plus up to $5,000 a year for education for up to two years.
Pat Danahy, president and CEO of the Greensboro Partnership , the city’s leading economic development group, said the news is difficult for everyone in the city, but he complimented the company on the generosity of its severance package.
American Express has encouraged its customers to use its websites for service and billing, and customers have responded.
About 50 percent of customers use the Internet for American Express service and 75 percent use it to pay their bills.
“We have seen a big reduction in business volumes due to changing consumer behavior,” Bush said.
Although the Greensboro center once employed more than 3,000 people in the 1990s , that figure dwindled through the years as the company cut jobs through retirements and resignations.
Now, Bush said, a third of the call center’s desks are vacant.
The building — a leased structure with 403,000 square feet of space — is too expensive for the company to maintain, Bush said.
American Express sold the $31.5 million building in 2004 to Inland Real Estate Group of Oak Brook, Ill . The building brought in $431,000 in local property taxes in 2010. Greensboro earned $85,000 a year for water service there.
With space available at its call centers in Fort Lauderdale, Phoenix and Salt Lake City , the logical choice was to move those jobs, Bush said. Greensboro performs a narrower range of services than the larger centers, Bush said.
American Express will not begin the changes for 90 days and the shutdown will not be finished until the end of 2011, the company said.
Overall, American Express expects to report a sharply higher fourth-quarter profit, although it will be reduced by charges from closing the Greensboro center. The company plans a worldwide consolidation that will eliminate 550 jobs, or nearly 1 percent of the credit card company’s work force.
Staff Writers Mark Binker, Amanda Lehmert and Taft Wireback, researcher Diane Lamb and The Associated Press contributed to this report.
Contact Richard M. Barron at 373-7371 or richard.barron@news-record.com
Photo Caption: Robert Garinger and Jim Bush discuss the decision during a news conference on Wednesday.
Do you work at American Express? We’d like to hear how today’s news will impact you. Give Amanda Lehmert a call, 373-7075, or email, amanda.lehmert@news-record.com.
Not all of the newspaper's content appears online.
*There is a fee for downloading some older articles.